ACNB 10-Q Quarterly Report March 31, 2025

ACNB CORP

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acnb-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 1-35015

ACNB CORPORATION

(Exact name of Registrant as specified in its charter)


Pennsylvania						23-2233457
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)


16 Lincoln Square , Gettysburg , Pennsylvania						17325
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: ( 717 ) 334-3161

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $2.50 par value per share

ACNB

The NASDAQ Stock Market, LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐

No ☒

The number of shares of the Registrant’s Common Stock outstanding on May 1, 2025, was 10,473,686 .

Table of Contents

ACNB CORPORATION

Table of Contents


		Page
Glossary		3
Part I – Financial Information
Item 1.	Consolidated Statements of Condition (Unaudited)	4
	Consolidated Statements of (Loss) Income (Unaudited)	5
	Consolidated Statements of Comprehensive Income (Unaudited)	6
	Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)	7
	Consolidated Statements of Cash Flows (Unaudited)	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	50
Part II – Other Information
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	52
Item 6.	Exhibits	53
	Signatures	57

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ACNB CORPORATION

Glossary of Defined Acronyms and Terms


ACL			Allowance for Credit Losses
ACNB Insurance Services			ACNB Insurance Services, Inc.
ACNB, Corporation or Company			ACNB Corporation
Acquisition			Acquisition of Traditions Bancorp, Inc. effective February 1, 2025
AFS			Available for Sale

ALCO			Asset Liability Committee
ASC			Accounting Standard Codification
ASU			Accounting Standard Update
ATM			Automatic Teller Machine
Bank			ACNB Bank
Basel III			Risk-based requirements and rules issued by federal banking agencies
bp or bps			Basis point(s)



CECL			Current Expected Credit Loss

CME			Chicago Mercantile Exchange
CODM			Chief Operating Decision Maker
COVID-19			Coronavirus Disease 2019
CRA			Community Reinvestment Act of 1977



ETR			Effective Tax Rate
Exchange Act			Securities Exchange Act of 1934
FASB			Financial Accounting Standards Board


FCBI			Frederick County Bancorp, Inc.
FDIC			Federal Deposit Insurance Corporation

FHLB			Federal Home Loan Bank


FOMC			Federal Open Market Committee
FTE			Fully Taxable Equivalent
GAAP			U.S. Generally Accepted Accounting Principles



HTM			Held to Maturity




Market Area			Southcentral Pennsylvania and Northern Maryland

N/A			Not Applicable
N/M			Not Meaningful (percentage changes greater than +/- 150% not considered meaningful)

OBS			Off-Balance Sheet
PCD			Purchased credit-deteriorated


Purchase Agreements			Subordinated Note Purchase Agreements
Purchasers			Institutional accredited investors and qualified institutional buyers


SEC			Securities and Exchange Commission

SOFR			Secured Overnight Financing Rate
Subordinated Notes			4.00% fixed-to-floating rate subordinated notes due March 31, 2031

Traditions			Traditions Bancorp, Inc.

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PART I - FINANCIAL INFORMATION

ACNB CORPORATION

ITEM 1 – FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CONDITION (UNAUDITED)


(Dollars in thousands, except per share data)	March 31, 2025		December 31, 2024
ASSETS
Cash and due from banks	$	23,422	$	16,352
Interest-bearing deposits with banks	100,141		30,910
Total Cash and Cash Equivalents	123,563		47,262
Equity securities with readily determinable fair values	933		919
Investment securities available for sale, at estimated fair value	455,819		393,975
Investment securities held to maturity, at amortized cost (fair value $ 56,219 , $ 56,924 )	64,554		64,578
Loans held for sale	21,413		426
Total loans, net of unearned income	2,322,209		1,682,910
Less: Allowance for credit losses	( 24,646 )		( 17,280 )
Loans, net	2,297,563		1,665,630

Premises and equipment, net	32,398		25,454
Right of use asset	5,440		2,663
Restricted investment in bank stocks	13,560		10,853
Investment in bank-owned life insurance	98,814		81,850
Investments in low-income housing partnerships	846		877
Goodwill	64,449		44,185
Intangible assets, net	25,835		7,838
Foreclosed assets held for resale	438		438
Other assets	64,416		47,882
Total Assets	$	3,270,041	$	2,394,830

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	562,700	$	451,503
Interest-bearing	1,977,309		1,340,998
Total Deposits	2,540,009		1,792,501
Short-term borrowings	44,188		15,826
Long-term borrowings	255,343		255,333
Lease liability	5,790		2,764
Allowance for unfunded commitments	1,883		1,394
Other liabilities	35,945		23,739
Total Liabilities	2,883,158		2,091,557

Stockholders’ Equity:
Preferred stock, $ 2.50 par value; 20,000,000 shares authorized; no shares outstanding at March 31, 2025 and December 31, 2024	—		—
Common stock, $ 2.50 par value; 20,000,000 shares authorized; 11,011,051 and 8,945,293 shares issued; 10,543,671 and 8,553,785 shares outstanding at March 31, 2025 and December 31, 2024, respectively	27,521		22,357
Treasury stock, at cost 467,380 and 391,508 shares at March 31, 2025 and December 31, 2024, respectively	( 14,309 )		( 11,203 )
Additional paid-in capital	178,011		99,163
Retained earnings	230,978		234,624
Accumulated other comprehensive loss	( 35,318 )		( 41,668 )
Total Stockholders’ Equity	386,883		303,273
Total Liabilities and Stockholders’ Equity	$	3,270,041	$	2,394,830

The accompanying notes are an integral part of the Consolidated Financial Statements.

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ACNB CORPORATION
CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)
	Three Months Ended March 31,
(Dollars in thousands, except share data)	2025		2024
INTEREST AND DIVIDEND INCOME
Loans, including fees:
Taxable	$	31,676	$	21,470
Tax-exempt	292		319
Investment Securities:
Taxable	2,902		2,911
Tax-exempt	288		284
Dividends	340		240
Other	792		750
Total Interest and Dividend Income	36,290		25,974
INTEREST EXPENSE
Deposits	5,996		2,160
Short-term borrowings	294		339
Long-term borrowings	2,910		2,882
Total Interest Expense	9,200		5,381
Net Interest Income	27,090		20,593
Provision for credit losses	5,968		223
Reversal of provision for unfunded commitments	( 480 )		( 151 )
Net Interest Income after Provisions for (Reversal of) Credit Losses and Unfunded Commitments	21,602		20,521
NONINTEREST INCOME
Insurance commissions	2,147		2,115
Service charges on deposits	1,094		991
Wealth management	1,060		962
Gain from mortgage loans held for sale	855		48
ATM debit card charges	831		819
Earnings on investment in bank-owned life insurance	580		477
Gain on life insurance proceeds	254		—
Net gains on sales or calls of investment securities	—		69
Net gains (losses) on equity securities	14		( 10 )


Other	349		196
Total Noninterest Income	7,184		5,667
NONINTEREST EXPENSES
Salaries and employee benefits	12,861		11,168
Equipment	2,280		1,729
Net occupancy	1,442		1,130
Professional services	577		616
Other tax	527		370
FDIC and regulatory	401		375
Intangible assets amortization	857		321


Merger-related	8,031		—

Other	2,359		1,953
Total Noninterest Expenses	29,335		17,662
(Loss) Income Before Income Taxes	( 549 )		8,526
Income tax (benefit) expense	( 277 )		1,758
Net (Loss) Income	$	( 272 )	$	6,768
PER SHARE DATA
Basic (loss) earnings	$	( 0.03 )	$	0.80
Diluted (loss) earnings	$	( 0.03 )	$	0.80
Weighted average shares basic	9,806,299		8,493,104
Weighted average shares diluted	9,823,475		8,511,648

The accompanying notes are an integral part of the Consolidated Financial Statements.

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ACNB CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
(In thousands)	2025		2024
NET (LOSS) INCOME	$	( 272 )	$	6,768

OTHER COMPREHENSIVE INCOME (LOSS)
INVESTMENT SECURITIES
Unrealized gains (losses) arising during the period, net of income tax expense (benefit) of $ 1,800 and $( 644 ), respectively	6,157		( 2,198 )
Reclassification adjustment for net AFS investment securities gains included in net income, net of income tax expense of $ 0 and $ 16 , respectively	—		53
Total unrealized gain (loss) on AFS investment securities	6,157		( 2,145 )
Amortization of unrealized losses on AFS investment securities transferred to HTM, net of income taxes of $ 56 and $ 63 , respectively	193		215

PENSION
Amortization of pension net loss, net of income tax expense of $ 0 and $ 4 , respectively	—		15


TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	6,350		( 1,915 )
TOTAL COMPREHENSIVE INCOME	$	6,078	$	4,853

The accompanying notes are an integral part of the Consolidated Financial Statements.

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ACNB CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

Three Months Ended March 31, 2025 and 2024


	Common Stock			Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
(Dollars in thousands, except per share data)	Shares	Amount
BALANCE – January 1, 2025	8,553,785	$	22,357	$	( 11,203 )	$	99,163	$	234,624	$	( 41,668 )	$	303,273
Net loss	—	—		—		—		( 272 )		—		( 272 )
Other comprehensive income, net of taxes	—	—		—		—		—		6,350		6,350
Issuance of common stock to acquire Traditions	2,035,246	5,088		—		78,561		—		—		83,649
Common stock shares issued	6,470	16		—		251		—		—		267
Repurchased shares	( 75,872 )	—		( 3,106 )		—		—		—		( 3,106 )
Restricted stock grants, net of forfeitures and withheld for taxes	24,042	60		—		( 576 )		—		—		( 516 )
Compensation expense for restricted shares	—	—		—		612		—		—		612
Cash dividends declared ($ 0.32 per share)	—	—		—		—		( 3,374 )		—		( 3,374 )
BALANCE – March 31, 2025	10,543,671	$	27,521	$	( 14,309 )	$	178,011	$	230,978	$	( 35,318 )	$	386,883


	Common Stock			Treasury Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
(Dollars in thousands, except per share data)	Shares	Amount
BALANCE – January 1, 2024	8,511,453	$	22,231	$	( 10,954 )	$	97,602	$	213,491	$	( 44,909 )	$	277,461
Net income	—	—		—		—		6,768		—		6,768
Other comprehensive loss, net of taxes	—	—		—		—		—		( 1,915 )		( 1,915 )
Common stock shares issued	4,898	13		—		161		—		—		174
Repurchased shares	( 4,200 )	—		( 147 )		—		—		—		( 147 )
Restricted stock grants, net of forfeitures and withheld for taxes	27,424	71		—		( 479 )		—		—		( 408 )
Compensation expense for restricted shares	—	—		—		534		—		—		534
Cash dividends declared ($ 0.30 per share)	—	—		—		—		( 2,547 )		—		( 2,547 )
BALANCE – March 31, 2024	8,539,575	$	22,315	$	( 11,101 )	$	97,818	$	217,712	$	( 46,824 )	$	279,920

The accompanying notes are an integral part of the Consolidated Financial Statements.

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ACNB CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
(In thousands)	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	( 272 )	$	6,768
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Gain on sales of loans originated for sale	( 855 )		( 48 )


Earnings on investment in bank-owned life insurance	( 580 )		( 477 )
Gain on life insurance proceeds	( 254 )		—
Gain on sales or calls of securities	—		( 69 )
(Gain) loss on equity securities	( 14 )		10
Restricted stock compensation expense	612		534

Depreciation and amortization	1,445		766
Provision for credit losses and unfunded commitments	5,488		72
Net amortization of investment securities premiums	385		414
Increase in interest receivable	( 615 )		( 60 )
Increase in interest payable	69		682
Mortgage loans originated for sale	( 26,749 )		( 1,820 )
Proceeds from sales of loans originated for sale	19,129		2,060
(Increase) decrease in other assets	( 2,771 )		3,589
Decrease (increase) in deferred tax asset	798		( 222 )
Increase (decrease) in other liabilities	4,113		( 1,381 )
Net Cash (Used in) Provided by Operating Activities	( 71 )		10,818
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from calls/maturities of investment securities held to maturity	171		184
Proceeds from calls/maturities of investment securities available for sale	6,668		9,225
Proceeds from sales of investment securities available for sale	97,883		14,336

Purchase of investment securities available for sale	( 61,055 )		—


Redemption (purchase) of restricted investment in bank stocks	616		( 1,200 )
Net decrease (increase) in loans	9,097		( 37,012 )



Net cash and cash equivalents received from acquisition	36,206		—

Capital expenditures	( 659 )		( 78 )


Net Cash Provided by (Used in) Investing Activities	88,927		( 14,545 )
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in noninterest-bearing deposits	825		( 749 )
Net increase (decrease) in interest-bearing deposits	5,175		( 25,840 )
Net increase (decrease) in short-term borrowings	28,362		( 39,579 )
Proceeds from long-term borrowings	—		60,000
Repayments on long-term borrowings	( 40,188 )		—
Dividends paid	( 3,374 )		( 2,547 )
Common stock repurchased	( 3,106 )		( 147 )
Common stock issued, net of restricted stock forfeitures and withheld for taxes	( 249 )		( 234 )
Net Cash Used In Financing Activities	( 12,555 )		( 9,096 )
Net Increase (Decrease) in Cash and Cash Equivalents	76,301		( 12,823 )
CASH AND CASH EQUIVALENTS — BEGINNING	47,262		65,958
CASH AND CASH EQUIVALENTS — ENDING	$	123,563	$	53,135
Supplemental disclosures of cash flow information
Cash paid for interest	$	7,718	$	5,321
Cash paid for income taxes	6		—
Supplemental disclosures of certain noncash activities:
Recognition of operating lease right of use assets	$	183	$	—
Recognition of operating lease liabilities	183		—
Transactions related to acquisition:
Increase in assets and liabilities:
Net assets acquired	$	877,557	$	—
Liabilities assumed	793,908		—














Common shares issued	83,649		—

The accompanying notes are an integral part of the Consolidated Financial Statements.

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ACNB CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Nature of Operations

ACNB Corporation, headquartered in Gettysburg, Pennsylvania, provides banking, wealth management, mortgage and insurance services to businesses and consumers through its wholly-owned subsidiaries, ACNB Bank and ACNB Insurance Services. The Bank engages in full-service commercial and consumer banking and wealth management services, including trust and retail brokerage, through its 33 community banking offices, including 24 community banking office locations in Adams, Cumberland, Franklin, Lancaster and York Counties, Pennsylvania, and nine community banking office locations in Carroll and Frederick Counties, Maryland. There is also a loan production office in Hunt Valley, Maryland.

Recent Acquisition

Effective February 1, 2025, ACNB closed the acquisition of Traditions Bancorp, Inc., holding company for Traditions Bank, York, Pennsylvania. Traditions was merged with and into a wholly-owned subsidiary of ACNB Corporation immediately followed by the merger of Traditions Bank with and into ACNB Bank. ACNB Bank is operating the former Traditions Bank offices as “Traditions Bank, A Division of ACNB Bank”. Traditions Bank operated eight community banking offices in South Central Pennsylvania which were included in the Acquisition. In April 2025, ACNB closed two of the eight Traditions Bank branches.

ACNB Insurance Services is a full-service insurance agency based in Westminster, Maryland, with additional locations in Jarrettsville, Maryland, and Gettysburg, Pennsylvania. The agency offers a broad range of property, casualty, health, life and disability insurance to both individual and commercial clients.

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary for a fair presentation. All such adjustments are of a normal recurring nature. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024. The Corporation evaluates subsequent events through the filing date of this Form 10-Q with the SEC. The results of operations for the three month periods ended March 31, 2025, are not necessarily indicative of the results to be expected for the full year.

Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. Reclassifications had no material effect on prior year net income or stockholders’ equity.

Significant Accounting Policies

The significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the Corporation’s 2024 Annual Report on Form 10-K. Those significant accounting policies are unchanged at March 31, 2025 with the exception of the following modifications or additions:

Loans Held for Sale

The Corporation previously elected to measure loans originated and intended for sale in the secondary market at the lower of aggregate cost or fair value. Net unrealized losses were recognized through a valuation allowance by charges to income. During the first quarter of 2025, management made the decision to measure loans held for sale at fair value to more appropriately reflect the performance of its entire mortgage banking activities in its Consolidated Financial Statements. The impact of the change in accounting policy for prior periods presented was deemed to be immaterial. Derivative financial instruments related to mortgage banking activities are also recorded at fair value, as detailed under the header “Derivative Financial Instruments and Hedging Activities” below and in Note 9, “Derivative Financial Instruments.” Changes in the fair value of loans held for sale and derivative financial instruments related to mortgage banking during the period are recorded as components of gain from mortgage loans held for sale on the Consolidated Statements of (Loss) Income. Interest income earned on mortgage loans held for sale is classified within interest income on the Consolidated Statements of (Loss) Income.

Derivative Instruments and Hedging Activities

FASB ASC 815, Derivatives and Hedging , provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) how derivative instruments

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and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Corporation’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

The Corporation records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Corporation has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Corporation may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Corporation elects not to apply hedge accounting.

Acquisition Accounting

The Corporation accounts for its mergers and acquisitions using the acquisition method of accounting, in accordance with the provisions of ASC 805 - Business Combinations . Under ASC 805, assets acquired and liabilities assumed in a business combination are at acquisition date fair value and transaction costs and restructuring costs associated with the business combination are expensed as incurred. The determination of fair values involves significant judgment regarding methods and assumptions, including discount rates, future expected cash flows, market conditions and other future events. The excess of the merger consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. The results of operations of the acquired entity are included in the consolidated statements of operations from the Acquisition date. In accordance with business combination accounting guidance, the Company's review of the fair values of the assets and liabilities acquired is ongoing, with management evaluating these fair values for up to one year following the Acquisition date. Adjustments would be recorded to goodwill in the period in which they were determined.

Accounting Standards Pending Adoption

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740)”. This ASU is intended to improve the disclosures for income taxes to address requests from investors, lenders, creditors and other allocators of capital that use the financial statements to make capital allocation decisions. The amendments in ASU 2023-09 will require consistent categories and greater disaggregation of information in the rate reconciliation disclosure as well as disclosure of income taxes paid disaggregated by jurisdiction. The amendments of ASU 2023-09 are effective for annual periods beginning after December 15, 2024, and early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Corporation intends to adopt the amendments of ASU 2023-09 effective January 1, 2025, and will include the required disclosures in its Annual Report on Form 10-K for the year ending December 31, 2025. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Subtopic 220-40)”. This ASU is intended to improve the decision usefulness of expense information on public business entities’ income statements through the disaggregation of relevant expense captions in the notes to the financial statements. The amendments of ASU 2024-03 are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and early adoption is permitted. The Corporation is currently evaluating the impact of this standard, and believes that its adoption will not have a material impact on the Corporation’s Consolidated Financial Statements.

Note 2 – Business Combination

Effective February 1, 2025, ACNB Corporation completed its acquisition of Traditions Bancorp, Inc., holding company for Traditions Bank, York, Pennsylvania. Traditions was merged with and into a wholly-owned subsidiary of ACNB Corporation immediately followed by the merger of Traditions Bank with and into ACNB Bank. ACNB Bank is operating the former Traditions Bank offices as “Traditions Bank, A Division of ACNB Bank”. In connection with the close of the Acquisition, Traditions stockholders received 0.7300 shares of ACNB Corporation common stock for each share of Traditions common stock that they owned as of the closing date, with cash paid in lieu of fractional shares. ACNB issued 2,035,246 shares of its common stock, and cash in exchange for fractional shares based on $ 41.10 per whole share of ACNB common stock. The transaction is valued at $ 83.8 million.

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Traditions’ results of operations were included in the ACNB’s results of operations beginning on February 1, 2025. Net interest income and income before income taxes for Traditions were estimated to be $ 5.9 million and $ 2.1 million, respectively, since the date of acquisition through March 31, 2025 and is included in the Corporation’s Consolidated Statements of (Loss) Income. ACNB’s financial results for any periods ended prior to February 1, 2025 reflect ACNB on a standalone basis. As a result, ACNB’s financial results for the three months ended March 31, 2025 may not be directly comparable to prior reported periods. Merger-related costs totaled $ 8.0 million for the three months ended March 31, 2025.

The acquisition method of accounting, in accordance with the provisions of FASB ASC Topic 805, Business Combinations , was used to account for the Acquisition. ACNB recorded the assets and liabilities of Traditions at their respective fair values as of February 1, 2025. Under the acquisition method of accounting, the total merger consideration is allocated to the acquired tangible and intangible assets and assumed liabilities of Traditions based on their estimated fair value as of the acquisition date of the merger. The excess of the merger consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill. ACNB recorded goodwill of $ 20.3 million in connection with the Acquisition, which is not amortized for financial reporting purposes, but is subject to annual impairment testing.

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The total merger consideration of $ 83.8 million is allocated to Traditions’ tangible and intangible assets and liabilities based on their fair values as follows:


(In thousands)	Traditions Bancorp, Inc. Book Value 1/31/2025		Acquisition Accounting Adjustments		Traditions Bancorp, Inc. Fair Value 1/31/2025
Consideration
Common stock					$	83,649
Cash consideration					157
Fair value of total consideration transferred					$	83,806

Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents	$	36,363	$	—	$	36,363
Investment securities, available for sale	98,484		( 818 )		97,666
Loans held for sale	12,512		—		12,512
Total loans	673,805		( 25,343 )		648,462
Less: Allowance for credit losses	( 4,045 )		2,581		( 1,464 )
Loans, net	669,760		( 22,762 )		646,998
Premises and equipment, net	7,235		( 362 )		6,873
Right of use asset	2,932		—		2,932
Restricted investment in bank stocks	3,323		—		3,323
Investment in bank-owned life insurance	16,384		—		16,384
Core deposit intangibles	—		18,854		18,854
Other assets	14,147		1,398		15,545
Total assets acquired	$	861,140	$	( 3,690 )	$	857,450

Deposits	$	741,723	$	( 215 )	$	741,508
Borrowings	40,000		188		40,188
Lease liability	3,125		—		3,125
Allowance for unfunded commitments	118		852		970
Other liabilities	8,158		( 41 )		8,117
Total liabilities assumed	$	793,124	$	784	$	793,908

Total identifiable net assets	$	68,016	$	( 4,474 )	$	63,542

Goodwill					$	20,264

ACNB used an independent valuation specialist to assist with the determination of fair values for certain acquired assets and assumed liabilities. As permitted under GAAP, the Corporation has up to twelve months following the date of the Acquisition to finalize the fair values of the acquired assets and assumed liabilities related to the Acquisition. During this measurement period, ACNB may record subsequent adjustments to goodwill for provisional amounts recorded at the Acquisition date, with provisional merger-related tax adjustments.

ACNB completed, shortly following the Acquisition date, the sale of approximately $ 98.0 million of Traditions’ investment securities with a yield of 5.03 %. With the proceeds from the sale, ACNB paid off $ 40.2 million of FHLB borrowings with a cost of 4.73 % and invested the remainder of the proceeds into investment securities with a yield of 5.07 %. The acquisition accounting adjustment on the AFS securities represents the difference between the fair value of the AFS securities as of January

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31, 2025 and the final proceeds received as a result of the sales. For the fair value policy see Note 10 – “Fair Value Measurements” in the Notes to Consolidated Financial Statements under Part I, Item I.

ACNB evaluated and classified the acquired loans between non-PCD or PCD. ACNB’s senior credit management team reviewed Traditions’ loan portfolio on a loan-by-loan basis to determine which loans met the definition of an ASC 326-20 PCD loan. PCD loans include loans which experienced more-than-insignificant credit deterioration since origination. PCD loans included loans on nonaccrual status, loans risk-rated pass/watch or worse, COVID-19 loan deferrals, loans more than 90 days past due and still accruing, accruing loans but were more than 60 days past due in the past, accruing loans but were more than 30 days past due more than 3 times in the past and other loans evaluated. The acquisition accounting adjustments for non-PCD loans and PCD loans were $ 21.6 million and $ 4.4 million, respectively, on the Acquisition date. Included in the acquisition accounting adjustment for loans was $ 635 thousand of net deferred income that served to decrease the acquisition accounting adjustment of the loans acquired.

ACNB recorded an allowance for credit losses of $ 6.9 million at the Acquisition date, comprised of $ 5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $ 1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The following table presents details related to the fair value of acquired PCD loans at the Acquisition date:


(In thousands)	Unpaid Principal Balance		Total Premium/(Discount)		Gross Up for PCD Allowance for Credit Losses		Fair Value of PCD Loans
PCD Accruing	$	140,053	$	( 5,359 )	$	1,464	$	136,158
PCD Non-Accruing	2,962		( 528 )		—		2,434
Total PCD Loans	$	143,015	$	( 5,887 )	$	1,464	$	138,592

The acquisition accounting adjustment for premises and equipment was $ 362 thousand at the Acquisition date as a result of updated independent market-based appraisals on real estate and the write-off of obsolete fixed assets.

Pursuant to customer-related intangible assets ASC 805-20-55-13(b), ACNB, with the assistance of an independent valuation specialist, completed a core deposit intangible asset valuation that resulted in a core deposit intangible asset of $ 18.9 million at the Acquisition date. To establish the core deposit intangible asset, ACNB used a present value analysis that calculated the expected after-tax cash flow benefits of each acquired core deposit type versus the cost of obtaining an alternative source of funding (brokered deposits) over the expected life of each acquired core deposit type, discounted at a long-term market oriented after-tax rate of return. The core deposit intangible asset is amortized based on the sum-of-the-years digits method over the expected life of 10 years.

The acquisition accounting adjustment for other assets was $ 1.4 million at the Acquisition date driven primarily by a net deferred tax position for each acquisition accounting adjustment. The acquisition accounting adjustment for deposits was $ 215 thousand at the Acquisition date as a result of acquisition accounting adjustments on certificates of deposits using a present value approach that represents the present value of the certificates’ expected contractual payments discounted by market rates for similar certificates of deposits. The acquisition accounting adjustment for the allowance for unfunded commitments was $ 852 thousand as a result of applying ACNB’s existing policies, procedures and methodologies in calculating the allowance for Traditions’ unfunded commitments. The acquisition accounting adjustment for other liabilities was $ 41 thousand at the Acquisition date as a result of the write-off of unearned letter of credit fees.

The following table presents supplemental pro forma information for the three months ended March 31, 2025 and 2024 as if the acquisition had occurred January 1, 2024. The unaudited proforma information includes adjustments for interest income on loans acquired, amortization of core deposit intangibles arising from the transaction, depreciation expense on property acquired, interest expense of deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates. In addition, the unaudited proforma information excludes merger-related expenses and the provision for credit losses on PCD loans at the Acquisition date, and does not reflect management’s estimate of any revenue-enhancing opportunities or anticipated cost savings as a result of the integration:


	Three months ended March 31,
(In thousands)	2025		2024
Net interest income	$	31,148	$	28,752
Net income	$	11,430	$	9,257

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Note 3 – Earnings Per Share

The Corporation has a simple capital structure. Basic earnings per share of common stock is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding less unvested restricted stock at the end of the period. Diluted earnings per share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding.


	Three Months Ended March 31,
	2025		2024
Weighted average shares outstanding (basic)	9,806,299		8,493,104
Dilutive effect of unvested shares	17,176		18,544
Weighted average shares outstanding (diluted)	9,823,475		8,511,648
Per share:
Basic	$	( 0.03 )	$	0.80
Diluted	( 0.03 )		0.80

There were no antidilutive instruments at March 31, 2025 and 2024.

Share Repurchase Plan

On October 24, 2022, the Corporation announced that the Board of Directors approved on October 18, 2022, a plan to repurchase, in open market and privately negotiated transactions, up to 255,575 , or approximately 3 %, of the outstanding shares of the Corporation’s common stock. This new common stock repurchase program replaces and supersedes any and all earlier announced repurchase plans. During the three months ended March 31, 2025 the Corporation repurchased 75,872 shares. There were 143,780 treasury shares purchased under this plan through March 31, 2025.

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Note 4 – Investment Securities

Fair value of equity securities with readily determinable fair values at March 31, 2025 and December 31, 2024, are as follows:


(In thousands)	Fair Value at Beginning of Period		Gains (Losses)		Fair Value at End of Period
Three Months Ended March 31, 2025
CRA Mutual Fund	$	919	$	14	$	933




Twelve Months Ended December 31, 2024
CRA Mutual Fund	928		( 9 )		919


	$	928	$	( 9 )	$	919

Amortized cost and fair value of investment securities were as follows:


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2025
Available for Sale
U.S. Government and agencies	$	159,443	$	—	$	13,795	$	145,648
Collateralized mortgage obligations	58,652		131		3,151		55,632
Residential mortgage-backed securities	164,592		51		17,419		147,224
Commercial mortgage-backed securities	81,013		312		4,216		77,109

Corporate bonds	31,825		47		1,666		30,206
	$	495,525	$	541	$	40,247	$	455,819

Held to Maturity

State and municipal	$	62,985	$	—	$	8,282	$	54,703
Residential mortgage-backed securities	1,569		—		53		1,516
	$	64,554	$	—	$	8,335	$	56,219

December 31, 2024
Available for Sale
U.S. Government and agencies	$	159,799	$	—	$	16,606	$	143,193
Collateralized mortgage obligations	39,540		—		3,886		35,654
Residential mortgage-backed securities	159,349		2		20,811		138,540
Commercial mortgage-backed securities	65,350		—		4,565		60,785

Corporate bonds	17,600		—		1,797		15,803
	$	441,638	$	2	$	47,665	$	393,975

Held to Maturity

State and municipal	$	62,838	$	—	$	7,586	$	55,252
Residential mortgage-backed securities	1,740		—		68		1,672
	$	64,578	$	—	$	7,654	$	56,924

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The following table shows the Corporation’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2025, and December 31, 2024:


	Less than 12 Months				12 Months or More				Total
(In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2025
Available for Sale
U.S. Government and agencies	$	—	$	—	$	145,648	$	13,795	$	145,648	$	13,795
Collateralized mortgage obligations	5,702		6		35,162		3,145		40,864		3,151
Residential mortgage-backed securities	2,710		—		134,660		17,419		137,370		17,419
Commercial mortgage-backed securities	1,461		14		28,956		4,202		30,417		4,216

Corporate bonds	—		—		15,435		1,666		15,435		1,666
	$	9,873	$	20	$	359,861	$	40,227	$	369,734	$	40,247

Held to Maturity
State and municipal	$	—	$	—	$	54,703	$	8,282	$	54,703	$	8,282
Residential mortgage-backed securities	—		—		1,516		53		1,516		53
	$	—	$	—	$	56,219	$	8,335	$	56,219	$	8,335

December 31, 2024
Available for Sale
U.S. Government and agencies	$	—	$	—	$	143,193	$	16,606	$	143,193	$	16,606
Collateralized mortgage obligations	—		—		35,654		3,886		35,654		3,886
Residential mortgage-backed securities	2,692		26		135,626		20,785		138,318		20,811
Commercial mortgage-backed securities	31,860		73		28,925		4,492		60,785		4,565

Corporate bonds	—		—		15,803		1,797		15,803		1,797
	$	34,552	$	99	$	359,201	$	47,566	$	393,753	$	47,665

Held to Maturity

State and municipal	$	—	$	—	$	55,252	$	7,586	$	55,252	$	7,586
Residential mortgage-backed securities	—		—		1,672		68		1,672		68
	$	—	$	—	$	56,924	$	7,654	$	56,924	$	7,654

All mortgage-backed securities, and those of a similar asset class, are government-sponsored enterprise pass-through instruments issued by the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation or they are issued by the Government National Mortgage Association which is backed by the U.S. government which guarantees the timely payment of principal on these investments.

The Company evaluates AFS debt securities for impairment in unrealized loss positions at each measurement date to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. In estimating credit events, management considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before anticipated recovery or if it does not expect to recover the entire amortized cost basis. There was no impairment on AFS debt securities as of March 31, 2025 and December 31, 2024. The Company evaluates HTM debt securities for expected credit losses at each measurement date to determine if an ACL is required. The Corporation did not have an ACL for HTM investment securities as of March 31, 2025 and December 31, 2024.

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Amortized cost and fair value at March 31, 2025, by contractual maturity, where applicable, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay with or without penalties. Securities not due at a single maturity date are shown separately.


	Available for Sale				Held to Maturity
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
1 year or less	$	18,694	$	18,413	$	—	$	—
Over 1 year through 5 years	103,172		95,682		4,185		3,755
Over 5 years through 10 years	67,402		60,213		30,375		28,491
Over 10 years	2,007		1,553		28,424		22,457
Mortgage-backed securities	304,250		279,958		1,570		1,516
	$	495,525	$	455,819	$	64,554	$	56,219

The proceeds from sales and calls of securities and the associated gains and losses are listed below:


	Three Months Ended March 31,
(In thousands)	2025		2024
Proceeds from sales	$	97,883	$	14,336
Proceeds from calls	500		1,984
Gross gains	—		87
Gross losses	—		18

ACNB received $ 97.7 million in proceeds from the sale of Traditions’ investments subsequent to the Acquisition date.

At March 31, 2025 and December 31, 2024, securities with a carrying value of $ 171.0 million and $ 157.3 million, respectively, were pledged as collateral as required by law on public and trust deposits, repurchase agreements, and for other purposes.

Note 5 – Loans and Allowance for Credit Losses

The following table presents the composition of the loan portfolio:


(In thousands)	March 31, 2025		December 31, 2024
Commercial real estate	$	1,254,402	$	969,514
Residential mortgage	591,488		401,950
Commercial and industrial	220,774		140,906
Home equity lines of credit	119,085		85,685
Real estate construction	127,663		76,773
Consumer	10,526		9,318
Gross loans	2,323,938		1,684,146
Unearned income	( 1,729 )		( 1,236 )
Total loans, net of unearned income	$	2,322,209	$	1,682,910

Loans with a fair value of $ 648.5 million at the Acquisition date were assumed and included an acquisition accounting adjustment of $ 25.3 million.

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One of the factors used to monitor the performance and credit quality of the loan portfolio is to analyze the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status:


(In thousands)	30–59 Days Past Due		60–89 Days Past Due		≥ 90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable ≥ 90 Days and Accruing
March 31, 2025
Commercial real estate	$	245	$	—	$	444	$	689	$	1,253,713	$	1,254,402	$	—
Residential mortgage	10,968		1,270		2,506		14,744		576,744		591,488		1,987
Commercial and industrial	12		378		144		534		220,240		220,774		—
Home equity lines of credit	999		72		—		1,071		118,014		119,085		—
Real estate construction	735		—		—		735		126,928		127,663		—
Consumer	126		22		—		148		10,378		10,526		—
Gross Loans	$	13,085	$	1,742	$	3,094	$	17,921	$	2,306,017	$	2,323,938	$	1,987


(In thousands)	30–59 Days Past Due		60–89 Days Past Due		≥ 90 Days Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable ≥ 90 Days and Accruing
December 31, 2024
Commercial real estate	$	763	$	527	$	314	$	1,604	$	967,910	$	969,514	$	—
Residential mortgage	953		987		850		2,790		399,160		401,950		850
Commercial and industrial	437		24		155		616		140,290		140,906		—
Home equity lines of credit	161		—		91		252		85,433		85,685		91
Real estate construction	15		11		—		26		76,747		76,773		—
Consumer	47		18		—		65		9,253		9,318		—
Gross Loans	$	2,376	$	1,567	$	1,410	$	5,353	$	1,678,793	$	1,684,146	$	941

Nonaccrual and Nonperforming Loans

Loans individually evaluated consist of nonaccrual loans, presented in the following table:


	March 31, 2025						December 31, 2024
(In thousands)	With a Related Allowance		Without a Related Allowance		Total		With a Related Allowance		Without a Related Allowance		Total

Commercial real estate	$	295	$	3,745	$	4,040	$	314	$	3,250	$	3,564
Residential mortgage	—		1,401		1,401		—		—		—
Commercial and industrial	2,023		590		2,613		2,081		226		2,307
Home equity lines of credit	—		8		8		—		—		—

Total	$	2,318	$	5,744	$	8,062	$	2,395	$	3,476	$	5,871

During the three months ended March 31, 2025, no material amount of interest income was recognized on nonaccrual loans subsequent to their classification as nonaccrual.

Total nonperforming loans are as follows:


(In thousands)	March 31, 2025		December 31, 2024
Nonaccrual loans	$	8,062	$	5,871
Greater than or equal to 90 days past due and accruing	1,987		941
Total nonperforming loans	$	10,049	$	6,812

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Collateral-Dependent Loans

A loan is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Corporation records a partial charge-off to reduce the collateral-dependent loan’s carrying value to the fair value of the collateral less cost to sell. Substantially all of the collateral supporting collateral-dependent loans consists of various types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging, agriculture land, and vacant land. Changes in the fair value of the collateral for individually evaluated loans are reported as provision for credit losses or a reversal of provision for credit losses in the period of change.

The following table presents the amortized cost basis of individually evaluated loans by type of collateral as of the periods presented:


	March 31, 2025				December 31, 2024
(In thousands)	Business Assets		Real Estate		Business Assets		Real Estate

Commercial real estate	$	—	$	4,040	$	—	$	3,564
Residential mortgage	—		1,401		—		—
Commercial and industrial	2,237		376		2,307		—
Home equity lines of credit	—		8		—		—


Total	$	2,237	$	5,825	$	2,307	$	3,564

Consumer residential mortgages and home equity lines of credit which are well secured by residential real estate properties and are in the process of collection are not considered nonaccrual, however, formal foreclosure proceedings are in process. These loans totaled $ 269 thousand at March 31, 2025 and $ 373 thousand at December 31, 2024 and are included in nonperforming loans if they are greater than or equal to 90 days past due.

Loan Modifications

The Corporation evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, or combinations of the above. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows.

During the three months ended March 31, 2025 and 2024, the Corporation did not modify any loans nor were there any commitments to lend any additional funds on existing modified loans.

The following presents the performance of loans modified in the previous twelve months as of March 31, 2025:


(In thousands)	Current		30-89 Days Past Due		≥ 90 Days Past Due		Total Past Due
Commercial real estate	$	2,293	$	—	$	—	$	—
Commercial and industrial	1,748		—		—		—
Total	$	4,041	$	—	$	—	$	—

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As of March 31, 2025, the Corporation had no loans that defaulted during the period that had been modified preceding the payment default when the borrower was experiencing financial difficulty at the time of modification. For purposes of this disclosure, a default occurs when, within 12 months of the original modification, either a full or partial charge-off occurs or the loan becomes 90 days or more past due.

Allowance for Credit Losses

The Corporation maintains an ACL at a level determined to be adequate to absorb expected credit losses associated with the Corporation’s financial instruments over the life of those instruments as of the balance sheet date. The ACL consists of loans evaluated collectively and individually for expected credit losses. The Corporation considers the performance of the loan portfolio and its impact on the ACL and does not assign internal risk ratings to smaller balance, homogeneous loans such as certain residential mortgage, home equity lines of credit, construction loans to individuals secured by residential real estate and consumer loans. For these loans, the Corporation evaluates credit quality based on the aging status of the loan and designates as performing and nonperforming.

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The following summarizes designated internal risk categories by portfolio segment for loans assigned a risk rating and those evaluated based on the performance status:


	March 31, 2025
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis
(In thousands)	2025		2024		2023		2022		2021		Prior				Total
Internally Risk Rated:
Commercial real estate
Pass	$	16,020	$	157,604	$	182,846	$	217,778	$	177,509	$	444,223	$	16,378	$	1,212,358
Special Mention	59		2,022		2,846		2,859		6,091		14,916		1,280		30,073
Substandard	—		—		—		2,277		338		9,311		45		11,971
Total Commercial real estate	$	16,079	$	159,626	$	185,692	$	222,914	$	183,938	$	468,450	$	17,703	$	1,254,402

Residential mortgage
Pass	$	9,326	$	31,536	$	37,684	$	26,423	$	40,031	$	60,995	$	510	$	206,505
Special Mention	239		130		209		165		144		3,129		123		4,139
Substandard	—		—		236		185		—		67		—		488
Total Residential Mortgage	$	9,565	$	31,666	$	38,129	$	26,773	$	40,175	$	64,191	$	633	$	211,132

Commercial and industrial
Pass	$	2,533	$	21,366	$	22,067	$	30,510	$	40,958	$	40,128	$	50,366	$	207,928
Special Mention	125		157		133		187		166		870		5,234		6,872
Substandard	—		—		516		843		302		983		3,330		5,974
Total Commercial and industrial	$	2,658	$	21,523	$	22,716	$	31,540	$	41,426	$	41,981	$	58,930	$	220,774
Year-to-date gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	14	$	—	$	14
Home equity lines of credit
Pass	$	—	$	—	$	292	$	90	$	33	$	338	$	7,660	$	8,413
Special Mention	—		—		—		—		96		—		723		819
Substandard	—		—		—		—		—		6		—		6
Total Home equity lines of credit	$	—	$	—	$	292	$	90	$	129	$	344	$	8,383	$	9,238

Real estate construction
Pass	$	11,454	$	30,501	$	24,414	$	8,230	$	1,762	$	826	$	5,775	$	82,962
Special Mention	—		—		44		5,004		—		466		46		5,560
Substandard	—		—		—		—		—		59		—		59
Total Real estate construction	$	11,454	$	30,501	$	24,458	$	13,234	$	1,762	$	1,351	$	5,821	$	88,581

Performance Rated:
Residential mortgage
Performing	$	6,358	$	32,442	$	61,561	$	91,411	$	43,110	$	135,324	$	6,763	$	376,969
Nonperforming	—		200		123		1,568		157		1,339		—		3,387
Total Residential Mortgage	$	6,358	$	32,642	$	61,684	$	92,979	$	43,267	$	136,663	$	6,763	$	380,356
Home equity lines of credit
Performing	$	—	$	—	$	17	$	33	$	—	$	2,457	$	107,332	$	109,839
Nonperforming	—		—		—		—		—		—		8		8
Total Home equity lines of credit	$	—	$	—	$	17	$	33	$	—	$	2,457	$	107,340	$	109,847
Real estate construction
Performing	$	3,504	$	32,111	$	723	$	1,528	$	156	$	1,060	$	—	$	39,082

Total Real estate construction	$	3,504	$	32,111	$	723	$	1,528	$	156	$	1,060	$	—	$	39,082
Consumer
Performing	$	332	$	1,796	$	1,341	$	1,540	$	416	$	890	$	4,211	$	10,526

Total Consumer	$	332	$	1,796	$	1,341	$	1,540	$	416	$	890	$	4,211	$	10,526
Year-to-date gross charge-offs	$	—	$	—	$	—	$	5	$	—	$	7	$	59	$	71
Total Portfolio loans:
Pass	$	39,333	$	241,007	$	267,303	$	283,031	$	260,293	$	546,510	$	80,689	$	1,718,166
Special Mention	423		2,309		3,232		8,215		6,497		19,381		7,406		47,463
Substandard	—		—		752		3,305		640		10,426		3,375		18,498
Performing	10,194		66,349		63,642		94,512		43,682		139,731		118,306		536,416
Nonperforming	—		200		123		1,568		157		1,339		8		3,395
Total Portfolio loans	$	49,950	$	309,865	$	335,052	$	390,631	$	311,269	$	717,387	$	209,784	$	2,323,938
Year-to-date gross charge-offs	$	—	$	—	$	—	$	5	$	—	$	21	$	59	$	85

Table of Contents


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis
(In thousands)	2024		2023		2022		2021		2020		Prior				Total
Internally Risk Rated:
Commercial real estate
Pass	$	120,989	$	135,995	$	164,167	$	121,092	$	55,408	$	312,999	$	17,276	$	927,926
Special Mention	1,887		3,826		2,880		6,639		2,177		11,613		1,303		30,325
Substandard	—		—		2,332		342		1,485		7,059		45		11,263
Total Commercial real estate	$	122,876	$	139,821	$	169,379	$	128,073	$	59,070	$	331,671	$	18,624	$	969,514

Residential mortgage
Pass	$	27,887	$	35,566	$	23,095	$	38,848	$	13,446	$	31,784	$	466	$	171,092
Special Mention	130		1,692		167		146		366		3,246		115		5,862
Substandard	—		237		188		—		—		68		—		493
Total Residential mortgage	$	28,017	$	37,495	$	23,450	$	38,994	$	13,812	$	35,098	$	581	$	177,447

Commercial and industrial
Pass	$	10,000	$	10,067	$	19,584	$	29,673	$	13,162	$	18,976	$	30,015	$	131,477
Special Mention	165		109		246		192		78		459		2,554		3,803
Substandard	—		526		468		335		2		979		3,316		5,626
Total Commercial and industrial	$	10,165	$	10,702	$	20,298	$	30,200	$	13,242	$	20,414	$	35,885	$	140,906
Year-to-date gross charge-offs	$	—	$	38	$	—	$	—	$	—	$	100	$	—	$	138
Home equity lines of credit
Pass	$	—	$	294	$	92	$	—	$	—	$	501	$	5,729	$	6,616
Special Mention	—		—		—		—		—		—		696		696
Substandard	—		—		—		—		—		6		—		6
Total Home equity lines of credit	$	—	$	294	$	92	$	—	$	—	$	507	$	6,425	$	7,318

Real estate construction
Pass	$	21,227	$	24,463	$	7,719	$	1,209	$	298	$	1,060	$	6,086	$	62,062
Special Mention	—		168		5,100		—		—		667		45		5,980
Substandard	—		—		—		—		—		62		—		62
Total Real estate construction	$	21,227	$	24,631	$	12,819	$	1,209	$	298	$	1,789	$	6,131	$	68,104

Performance Rated:
Residential mortgage
Performing	$	14,786	$	41,275	$	39,943	$	13,523	$	13,876	$	100,601	$	72	$	224,076
Nonperforming	—		—		—		—		—		427		—		427
Total Residential mortgage	$	14,786	$	41,275	$	39,943	$	13,523	$	13,876	$	101,028	$	72	$	224,503
Home equity lines of credit
Performing	$	—	$	18	$	34	$	—	$	12	$	2,591	$	75,621	$	78,276
Nonperforming	—		—		—		—		—		—		91		91
Total Home equity lines of credit	$	—	$	18	$	34	$	—	$	12	$	2,591	$	75,712	$	78,367
Real estate construction
Performing	$	6,486	$	222	$	725	$	160	$	188	$	888	$	—	$	8,669

Total Real estate construction	$	6,486	$	222	$	725	$	160	$	188	$	888	$	—	$	8,669
Consumer
Performing	$	2,000	$	1,521	$	1,694	$	465	$	276	$	778	$	2,584	$	9,318

Total Consumer	$	2,000	$	1,521	$	1,694	$	465	$	276	$	778	$	2,584	$	9,318
Year-to-date gross charge-offs	$	—	$	4	$	9	$	—	$	1	$	7	$	197	$	218
Total Portfolio loans
Pass	$	180,103	$	206,385	$	214,657	$	190,822	$	82,314	$	365,320	$	59,572	$	1,299,173
Special Mention	2,182		5,795		8,393		6,977		2,621		15,985		4,713		46,666
Substandard	—		763		2,988		677		1,487		8,174		3,361		17,450
Performing	23,272		43,036		42,396		14,148		14,352		104,858		78,277		320,339
Nonperforming	—		—		—		—		—		427		91		518
Total Portfolio loans	$	205,557	$	255,979	$	268,434	$	212,624	$	100,774	$	494,764	$	146,014	$	1,684,146
Year-to-date gross charge-offs	$	—	$	42	$	9	$	—	$	1	$	107	$	197	$	356

Table of Contents

The following table presents the activity in the ACL by loan portfolio segment:


(In thousands)	Commercial Real Estate		Residential Mortgage		Commercial and Industrial		Home Equity Lines of Credit		Real Estate Construction		Consumer		Total
Three Months Ended March 31, 2025
Beginning balance - January 1, 2025	$	10,578	$	2,976	$	1,416	$	294	$	1,918	$	98	$	17,280
Allowance established for acquired PCD loans	798		140		194		13		169		150		1,464
Charge-offs	—		—		( 14 )		—		—		( 71 )		( 85 )
Recoveries	—		—		3		—		—		16		19
Provisions (reversal of)	2,173		2,012		629		180		1,051		( 77 )		5,968
Ending balance -March 31, 2025	$	13,549	$	5,128	$	2,228	$	487	$	3,138	$	116	$	24,646







Three Months Ended March 31, 2024
Beginning balance - January 1, 2024	$	12,010	$	3,303	$	2,048	$	397	$	2,070	$	141	$	19,969
Charge-offs	—		—		—		—		—		( 60 )		( 60 )
Recoveries	—		—		15		—		—		25		40
Provisions (reversal of)	230		( 76 )		( 103 )		( 83 )		243		12		223
Ending balance - March 31, 2024	$	12,240	$	3,227	$	1,960	$	314	$	2,313	$	118	$	20,172

Note 6 – Goodwill and Intangible Assets

Goodwill totaled $ 64.4 million and $ 44.2 million as of March 31, 2025 and December 31, 2024, respectively. Goodwill, which has an indefinite useful life, is evaluated for impairment annually or more frequently if events and circumstances indicate that the asset might be impaired. The Corporation did not identify any goodwill impairment on the Bank or ACNB Insurance Services from its most recent testing performed as of November 30, 2024 using the qualitative approach. There were no impairment losses or accumulated impairment losses associated with goodwill as of March 31, 2025 and December 31, 2024.

The following table presents Goodwill at March 31, 2025 and December 31, 2024:


(In thousands)	March 31, 2025		December 31, 2024
Balance, beginning of year	$	44,185	$	44,185
Acquired goodwill	20,264		—
Balance, end of period	$	64,449	$	44,185

The following table presents intangible assets, net for the periods shown below:


	Three Months Ended March 31,
(In thousands)	2025		2024
Beginning of period	$	7,838	$	9,082
Acquired core deposit intangible	18,854		—
Amortization expense	( 857 )		( 321 )
Balance, end of period	$	25,835	$	8,761

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The following table shows the amortization expense of the intangible assets for future periods:


Year	(In thousands)
Remainder of 2025	$	3,400
2026	4,117
2027	3,628
2028	3,139
2029	2,732
Thereafter	8,819
	$	25,835

Note 7 – Deposits

Deposits were comprised of the following for the periods presented:


(In thousands)	March 31, 2025		December 31, 2024
Noninterest-bearing demand deposits	$	562,700	$	451,503
Interest-bearing demand deposits	609,187		505,096
Money market	549,704		251,667
Savings	341,291		311,207
Total demand and savings	2,062,882		1,519,473
Time	477,127		273,028
Total deposits	$	2,540,009	$	1,792,501

Time deposits include brokered deposits totaling $ 54.0 million at March 31, 2025 and $ 24.1 million at December 31, 2024. Deposits with a fair value of $ 741.5 million at the date of the Acquisition were assumed and included an acquisition accounting adjustment of $ 215 thousand.

Scheduled maturities of time deposits at March 31, 2025 are as follows:


	Time Deposits
(In thousands)	Less than $250,000		$250,000 or more
Less than 1 year	$	349,879	$	68,879
1 - 2 years	31,782		1,597
2 - 3 years	16,771		1,315
3 - 4 years	2,326		1,606
4 - 5 years	2,917		—
Thereafter	55		—
Total time deposits	$	403,730	$	73,397

Note 8 – Borrowings

Short-term borrowings and weighted-average interest rates for the periods presented:


	March 31, 2025				December 31, 2024
(In thousands)	Amount		Rate		Amount		Rate

Securities sold under repurchase agreements	$	14,059	0.19	%	$	15,826	0.23	%
FHLB advance	25,000		4.43		—		—
Federal funds purchased	5,129		4.33		—		—
	$	44,188	3.07	%	$	15,826	0.23	%

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Borrowings with original maturities of one year or less are classified as short-term. Securities sold under repurchase agreements are comprised of customer repurchase agreements, which are sweep accounts with next-day maturities utilized by larger commercial customers to earn interest on their funds. Securities are pledged to these customers in an amount at least equal to the outstanding balance. Under an agreement with the FHLB, the Bank has short-term borrowing capacity included within its maximum borrowing capacity. All FHLB advances are collateralized by a security agreement covering qualifying loans. In addition, all FHLB advances are secured by the FHLB capital stock owned by the Bank having a par value of $ 13.3 million at March 31, 2025.

Long-term borrowings and their weighted-average contractual rates were comprised of the following for the periods presented:


	March 31, 2025				December 31, 2024
(In thousands)	Amount		Rate		Amount		Rate
FHLB fixed-rate advances maturing:
2026	$	80,000	4.71	%	$	80,000	4.71	%
2027	90,000		4.55		90,000		4.55
2028	35,000		4.23		35,000		4.23
2029	30,000		4.25		30,000		4.25
Trust preferred subordinated debt 1	5,343		6.25		5,333		6.25
Subordinated debt	15,000		4.00		15,000		4.00
	$	255,343	4.52	%	$	255,333	4.52	%

________________________________________

1 Net of purchase accounting fair value mark.

The long-term FHLB advances have a weighted average rate of 4.52 %, and are collateralized by the assets defined in the security agreement and FHLB capital stock described previously. Based on this collateral and ACNB’s holding of FHLB stock, ACNB is eligible to borrow up to $ 950.9 million, of which $ 688.6 million was available at March 31, 2025.

The trust preferred subordinated debt is comprised of debt securities issued by FCBI in December 2006 and assumed by ACNB Corporation through the acquisition of FCBI. FCBI completed the private placement of an aggregate of $ 6.0 million of trust preferred securities. The interest rate on the subordinated debentures is adjusted quarterly to 163 bps over the three-month CME Term SOFR plus applicable tenor spread adjustment. On March 13, 2025, the most recent interest rate reset date, the interest rate was adjusted to 6.19 % for the period ending June 15, 2025. The trust preferred securities mature on December 15, 2036, and may be redeemed at par, at the Corporation’s option, on any interest payment date. The trust preferred subordinated debt is considered Tier 1 capital for the consolidated capital ratios.

On March 30, 2021, the Company entered into Purchase Agreements with the Purchasers pursuant to which the Company sold and issued $ 15.0 million in aggregate principal amount of its 4.00 % fixed-to-floating rate subordinated notes due March 31, 2031. The Subordinated Notes bear interest at a fixed rate of 4.00 % per year, from and including March 30, 2021 to, but excluding, March 31, 2026 or earlier redemption date. From and including March 31, 2026 to, but excluding the maturity date or earlier redemption date, the interest rate will reset quarterly at a variable rate equal to the then current 90-day average SOFR plus 329 bps. As provided in the Subordinated Notes, the interest rate on the Subordinated Notes during the applicable floating rate period may be determined based on a rate other than the 90-day average SOFR. The Subordinated Notes were issued by the Corporation to the Purchasers at a price equal to 100 % of their face amount. The Subordinated Notes have a stated maturity of March 31, 2031, are redeemable by the Company at its option, in whole or in part, on or after March 30, 2026, and at any time upon the occurrences of certain events. The Subordinated Notes are considered Tier 2 capital for the consolidated capital ratios.

During the first quarter of 2025, ACNB paid off $ 40.2 million of short-term and long-term FHLB borrowings held by Traditions with a cost of 4.73 % shortly following the Acquisition date.

Note 9 – Derivative Financial Instruments

ACNB is exposed to certain risks arising from both its business operations and economic conditions. ACNB manages market risk, including interest rate risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Corporation enters into derivative financial instruments to manage interest rate risk that arise from business operations.

All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Condition. Until a derivative is settled, favorable changes in fair values result in unrealized gains that are recognized as assets, while unfavorable changes result in unrealized losses that are recognized as liabilities.

Table of Contents

ACNB applies hedge accounting, when applicable, to its derivatives used for interest rate risk management purposes. Hedge accounting is permitted only if specific criteria are met, including a requirement that a highly effective relationship exist between the derivative instrument and the hedged item, both at inception of the hedge and on an ongoing basis. The hedge accounting method depends upon whether the derivative instrument is classified as a fair value hedge (i.e. hedging an exposure related to a recognized asset or liability, or a firm commitment) or a cash flow hedge (i.e. hedging an exposure related to the variability of future cash flows associated with a recognized asset or liability, or a forecasted transaction). Changes in the fair value of effective fair value hedges are recognized in current earnings (with the change in fair value of the hedged asset or liability also recorded in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income or loss until earnings are affected by the variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value of derivatives for which hedge accounting is not applied are recognized in current earnings.

Interest rate-lock commitments extended to borrowers relate to the origination of residential mortgage loans. To mitigate the interest rate risk inherent in these commitments, ACNB enters into mandatory delivery and best efforts contracts to sell adjustable-rate and fixed-rate residential mortgage loans (servicing released). Forward commitments and interest rate-lock commitments on residential mortgage loans are considered derivatives. Hedge accounting has not been applied for these derivatives. Accordingly, changes in the fair value of forward and interest rate-lock commitments are recognized in current earnings .

ACNB executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously offset with essentially matching interest rate swaps with ACNB’s counterparties, such that ACNB minimizes its net risk exposure resulting from such transactions. Hedge accounting has not been applied for these derivatives. Accordingly, changes in the fair value of all such interest rate swaps are recognized in current earnings .

The following table presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Consolidated Statements of Condition as of March 31, 2025 and December 31, 2024:


	March 31, 2025					December 31, 2024
(In thousands)	Notional Amount		Asset (Liability) Fair Value		Statements of Condition Location	Notional Amount		Asset (Liability) Fair Value
Interest rate lock commitments:
Assets	$	67,226	$	1,472	Other Assets	$	—	$	—
Liabilities	—		—		Other Liabilities	—		—

Forward commitments:
Assets	4,079		—		Other Assets	—		—
Liabilities	26,750		88		Other Liabilities	—		—

Interest rate derivatives with customers:
Assets	—		—		Other Assets	—		—
Liabilities	56,119		4,894		Other Liabilities	—		—

Interest rate derivatives with dealer counterparties:
Assets	56,119		4,894		Other Assets	—		—
Liabilities	—		—		Other Liabilities	—		—

Table of Contents

The following presents a summary of the fair value gains and losses on derivative financial instruments for the three months ended March 31, 2025 and 2024:


(In thousands)	Three months ended March 31, 2025		Three months ended March 31, 2024		Consolidated Statements of (Loss) Income Classification
Interest Rate Lock Commitments	$	260	$	—	Gain from mortgage loans held for sale
Forward Commitments	( 15 )		—		Gain from mortgage loans held for sale

Note 10 – Fair Value Measurements

Fair value is the exchange price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions.

Fair value measurement establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 — Quoted prices for similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Table of Contents

The following tables present assets measured at fair value and the basis of measurement used at the periods presented:


	March 31, 2025
(In thousands)	Basis	Level 1		Level 2		Level 3		Total
Assets
Equity securities with readily determinable fair values	Recurring	$	933	$	—	$	—	$	933
AFS Investment Securities:
U.S. Government and agencies		—		145,648		—		145,648
Collateralized mortgage obligations		—		55,632		—		55,632
Residential mortgage-backed securities		—		147,224		—		147,224
Commercial mortgage-backed securities		—		77,109		—		77,109

Corporate bonds		—		30,206		—		30,206


Total AFS Investment Securities	Recurring	$	—	$	455,819	$	—	$	455,819
Loans held for sale	Recurring	—		21,413		—		21,413
Derivative assets	Recurring	—		6,366		—		6,366
Individually evaluated loans	Non-recurring	—		—		1,750		1,750
Foreclosed assets held for resale	Non-recurring	—		—		438		438
Liabilities
Derivative liabilities	Recurring	$	—	$	4,982	$	—	$	4,982


	December 31, 2024
(In thousands)	Basis	Level 1		Level 2		Level 3		Total
Equity securities with readily determinable fair values	Recurring	$	919	$	—	$	—	$	919
AFS Investment Securities:
U.S. Government and agencies		—		143,193		—		143,193
Collateralized mortgage obligations		—		35,654		—		35,654
Residential mortgage-backed securities		—		138,540		—		138,540
Commercial mortgage-backed securities		—		60,785		—		60,785

Corporate bonds		—		15,803		—		15,803


Total AFS Investment Securities	Recurring	$	—	$	393,975	$	—	$	393,975
Loans held for sale	Recurring	—		426		—		426
Individually evaluated loans	Non-recurring	—		—		1,690		1,690
Foreclosed assets held for resale	Non-recurring	—		—		438		438

The valuation techniques used to measure fair value for the items in the preceding tables are as follows:

Equity securities — The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Statements of Condition, with realized and unrealized gains and losses reported in noninterest income on the Consolidated Statements of (Loss) Income. They are classified as Level 1 assets.

Available for sale investment securities — Included in this asset category are debt securities. Level 2 investment securities are valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics. Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing. Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, including market research publications. For certain security types, additional inputs may be used, or some of the standard market inputs may not be applicable.

• U.S. Government and agencies — These debt securities are classified as Level 2. Fair values are determined by a third-party pricing service, as detailed above.

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• Collateralized mortgage obligations and Mortgage-backed securities — These debt securities are classified as Level 2. Fair values are determined by a third-party pricing service, as detailed above.

• Corporate bonds — This category consists of subordinated and senior debt issued by financial institutions and are classified as Level 2 investments. The fair values for these corporate debt securities are determined by a third-party pricing service, as detailed above.

Loans held for sale — This category includes mortgage loans held for sale that are measured at fair value utilizing Level 2 measurements. Fair values are measured as the price that secondary market investors were offering for loans with similar characteristics.

Individually evaluated loans — This category consists of loans that were individually evaluated for impairment and have a specific reserve. They are classified as Level 3 assets.

Foreclosed assets held for resale — This category consists of foreclosed assets that are held for resale and classified as Level 3 assets, for which the fair values are based on estimated selling prices less estimated selling costs for similar assets in active markets.

Derivative Financial Instruments — Derivative financial instruments include interest rate lock commitments, forward commitments and interest rate swaps. The fair value of interest rate lock commitments is derived from the value of the underlying loans, adjusted for changes in market interest rates relative to the committed rate. The fair value of forward sales commitments is based on quoted prices for mortgage-backed securities with similar characteristics. The fair value of interest rate swaps is based upon broker quotes. They are classified as Level 2 assets.

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

(Dollars in thousands)

Fair Value Estimate

Valuation Technique 1

Unobservable Input 2

Range

Weighted Average

March 31, 2025

Individually evaluated loans

1,750

Appraisal of collateral

Appraisal adjustments

16 % – 100 %

48 %

Foreclosed assets held for resale

438

Appraisal of collateral

Appraisal adjustments

17 % – 53 %

50 %

December 31, 2024

Individually evaluated loans

1,690

Appraisal of collateral

Appraisal adjustments

16 % – 100 %

47 %

Foreclosed assets held for resale

438

Appraisal of collateral

Appraisal adjustments

17 % – 53 %

50 %

_______________________________________

1 Fair value is generally determined through management’s estimate or independent third-party appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable.

2 Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received, and/or age of the appraisal.

The following information should not be interpreted as an estimate of the fair value of the entire Corporation since a fair value calculation is only provided for a limited portion of the Corporation’s assets and liabilities. Management uses its best judgment in estimating the fair value of the Corporation’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Corporation could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these Consolidated Financial Statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful.

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The following tables present the carrying amount and the estimated fair value of the Corporation’s financial instruments:


	March 31, 2025
	Carrying Amount		Estimated Fair Value
(In thousands)			Total		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	23,422	$	23,422	$	23,422	$	—	$	—
Interest-bearing deposits with banks	100,141		100,141		100,141		—		—
Equity securities with readily determinable fair values	933		933		933		—		—
Investment securities AFS	455,819		455,819		—		455,819		—
Investment securities HTM	64,554		56,219		—		56,219		—
Loans held for sale	21,413		21,413		—		21,413		—
Loans, net	2,297,563		2,288,564		—		—		2,288,564
Accrued interest receivable	11,720		11,720		—		11,720		—
Restricted investment in bank stocks	13,560		N/A		—		N/A		—
Derivative assets	6,366		6,366		—		6,366		—

Financial liabilities:
Demand deposits, savings, and money markets	$	2,062,882	$	1,757,870	$	—	$	1,757,870	$	—
Time deposits	477,127		469,483		—		469,483		—
Securities sold under repurchase agreements	14,059		14,940		—		14,940		—
Federal funds purchased	5,129		5,214		—		5,214		—
FHLB Advances	260,000		262,678		—		262,678		—
Trust preferred and subordinated debt	20,343		18,581		—		18,581		—
Accrued interest payable	3,033		3,033		—		3,033		—
Derivative liabilities	4,982		4,982		—		4,982		—

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	December 31, 2024
	Carrying Amount		Estimated Fair Value
(In thousands)			Total		Level 1		Level 2		Level 3
Financial assets:
Cash and due from banks	$	16,352	$	16,352	$	16,352	$	—	$	—
Interest-bearing deposits with banks	30,910		30,910		30,910		—		—
Equity securities with readily determinable fair values	919		919		919		—		—
Investment securities AFS	393,975		393,975		—		393,975		—
Investment securities HTM	64,578		56,924		—		56,924		—
Loans held for sale	426		426		—		426		—
Loans, net	1,665,630		1,635,351		—		—		1,635,351
Accrued interest receivable	8,189		8,189		—		8,189		—
Restricted investment in bank stocks	10,853		N/A		—		N/A		—

Financial liabilities:
Demand deposits, savings, and money markets	$	1,519,473	$	1,269,889	$	—	$	1,269,889	$	—
Time deposits	273,028		267,336		—		267,336		—
Securities sold under repurchase agreements	15,826		16,435		—		16,435		—
FHLB Advances	235,000		235,290		—		235,290		—
Trust preferred and subordinated debt	20,333		18,420		—		18,420		—
Accrued interest payable	1,551		1,551		—		1,551		—

Note 11 – Stock-Based Compensation

The Corporation grants equity awards to employees in the form of restricted stock awards under its ACNB Corporation 2018 Omnibus Stock Incentive Plan. The fair value of equity awards granted to employees is recognized as compensation expense over the vesting period of the stock issued. During the first quarter of 2025, 36,887 restricted stock awards were granted and 38,476 restricted stock awards vested.

The following table presents compensation expense and the related tax benefits for equity awards recognized in the Consolidated Statements of (Loss) Income:


	Three Months Ended March 31,
(In thousands)	2025		2024
Compensation Expense	$	612	$	534
Tax benefit	( 138 )		( 121 )
Total stock-based compensation, net of tax	$	474	$	413

Note 12 – Defined Benefit Pension Plan

The components of net periodic benefit income related to the non-contributory, defined benefit pension plan were as follows:


	Three Months Ended March 31,
(In thousands)	2025		2024
Service cost	$	91	$	107
Interest cost	399		374
Expected return on plan assets	( 685 )		( 712 )
Amortization of net loss	—		19


Net Periodic Benefit Income	$	( 195 )	$	( 212 )

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The Corporation has determined that it will not be contributing to the defined benefit plan in 2025 based on current levels and expected returns on plan assets. Effective April 1, 2012, no inactive or former participant in the plan is eligible to again participate in the plan, and no employee hired after March 31, 2012, is eligible to participate in the plan.

Note 13 – Commitments and Contingencies

Commitments

The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments consist primarily of commitments to extend credit (typically mortgages and commercial loans) and, to a lesser extent, standby letters of credit. To varying degrees, these instruments involve elements of credit and interest rate risk in excess of the amount recognized on the Consolidated Statements of Condition.

The Corporation’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Corporation uses the same credit policies in making commitments and conditional obligations as it does for on balance sheet instruments. The Corporation does not anticipate any material losses from these commitments.

Commitments to extend credit, including commitments to grant loans and unfunded commitments under lines of credit, are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Corporation upon extensions of credit, is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, property and equipment and income-producing commercial properties. On loans secured by real estate, the Corporation generally requires loan to value ratios of no greater than 80 %.

Standby letters of credit are conditional commitments issued by the Corporation to guarantee the performance of a customer to a third-party. Those guarantees are primarily issued to support public and private borrowing arrangements and similar transactions. The terms of the letters of credit vary and may have renewal features. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Corporation generally holds collateral and/or personal guarantees supporting those commitments for which collateral is deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral and the enforcement of guarantees would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees.

The Corporation maintains a $ 5.0 million unsecured line of credit with a correspondent bank. The Corporation guarantees a note related to a $ 1.5 million commercial line of credit with a correspondent bank, with normal terms and conditions for such a line, for ACNB Insurance Services, the borrower. The commercial line of credit is for general working capital needs as they arise by the ACNB Insurance Services. The liability is recorded for the net drawn amount of this line, no further liability is recorded for the remaining line as to the guarantor’s obligation as the guarantor would have full recourse from all assets of its wholly-owned subsidiary. There were no advances on these lines at March 31, 2025 and at December 31, 2024.

The Corporation has not been required to perform on any financial guarantees, and has not incurred any losses on its commitments during the past three years.

A summary of the Corporation’s commitments were as follows:


(In thousands)	March 31, 2025		December 31, 2024
Commitments to extend credit	$	569,093	$	372,839
Standby letters of credit	25,192		15,103

Contingencies

The Corporation is subject to claims and lawsuits which arise primarily in the ordinary course of business. Based on information presently available and advice received from legal counsel representing the Corporation in connection with any such claims and lawsuits, it is the opinion of management that the disposition or ultimate determination of any such claims and

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lawsuits will not have a material adverse effect on the consolidated financial position, consolidated results of operations or liquidity of the Corporation.

Note 14 – Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss, net of taxes, are as follows:


(In thousands)	Unrealized (Losses) Gains on Securities		Pension Liability		Accumulated Other Comprehensive Loss

Balance at December 31, 2024	$	( 38,160 )	$	( 3,508 )	$	( 41,668 )
Unrealized gain on AFS securities, net of income tax	6,157		—		6,157

Amortization of unrealized losses on securities transferred to HTM, net of tax	193		—		193


Net current period other comprehensive income	6,350		—		6,350
Balance at March 31, 2025	$	( 31,810 )	$	( 3,508 )	$	( 35,318 )












Balance at December 31, 2023	$	( 40,952 )	$	( 3,957 )	$	( 44,909 )
Unrealized loss on AFS securities, net of income tax	( 2,198 )		—		( 2,198 )
Realized gains on securities, net of income tax	53		—		53
Amortization of unrealized losses on securities transferred to HTM, net of tax	215		—		215
Amortization of pension net gain, net of tax	—		15		15

Net current period other comprehensive (loss) income	( 1,930 )		15		( 1,915 )
Balance at March 31, 2024	$	( 42,882 )	$	( 3,942 )	$	( 46,824 )

Note 15 – Segment Reporting

The Corporation’s reportable segments are determined by the ACNB Board of Directors. The reportable segments are determined by how operating decisions are made and performance is assessed. The CODM evaluates the financial performance of the various business components by evaluating revenue streams, significant expenses and budget to actual results in assessing the performance of the Corporation’s segments and in order to determine the allocation of resources. The ACNB Board of Directors has determined that the Corporation has two reporting segments, the Bank and ACNB Insurance Services and considers the President and CEO of ACNB Corporation to be the CODM of both reporting segments. Key measurements of performance in the banking segment are the net interest margin and the provision for credit losses, both which indicate the Bank’s ability to manage risk, and also the Bank’s ability to grow noninterest income and manage the largest noninterest expense, salaries and employee benefits. AIS Insurance Services is a subsidiary of the Corporation and is governed by its own Board of Directors. Key measurements of performance are revenues from commissions on insurance policies and the significant expense associated with those revenues are salaries and employee benefits. These two factors are significant in assessing the performance of the agency.

Segment information as of and for the periods listed below is as follows:


(In thousands)	Banking		Insurance		Other 1		Consolidated
Three Months Ended March 31, 2025
Interest income	$	36,290	$	1	$	( 1 )	$	36,290
Noninterest income	5,025		2,147		12		7,184
Total consolidated revenues							43,474
Interest expense	8,951		—		249		9,200
Provision for credit losses and unfunded commitments	5,488		—		—		5,488
Depreciation and amortization expense	1,250		195		—		1,445
Salaries and employee benefits	11,298		1,462		101		12,861
Other noninterest expense 2	14,564		336		129		15,029
(Loss) income before income taxes	( 236 )		155		( 468 )		( 549 )
Income tax (benefit) expense	( 227 )		42		( 92 )		( 277 )
Net (loss) income	$	( 9 )	$	113	$	( 376 )	$	( 272 )
Total assets	$	3,252,111	$	22,437	$	( 4,507 )	$	3,270,041
Goodwill	$	56,064	$	8,385	$	—	$	64,449
Capital expenditures	$	654	$	5	$	—	$	659

Three Months Ended March 31, 2024
Interest income	$	25,965	$	1	$	8	$	25,974
Noninterest income	3,552		2,115		—		5,667
Total consolidated revenues							31,641
Interest expense	5,118		—		263		5,381
Provision for credit losses and unfunded commitments	72		—		—		72
Depreciation and amortization expense	567		199		—		766
Salaries and employee benefits	9,617		1,453		98		11,168
Other noninterest expense 2	5,189		392		147		5,728
Income (loss) before income taxes	8,954		72		( 500 )		8,526
Income tax expense (benefit)	1,843		20		( 105 )		1,758
Net income (loss)	$	7,111	$	52	$	( 395 )	$	6,768
Total assets	$	2,395,476	$	21,896	$	( 3,084 )	$	2,414,288
Goodwill	$	35,800	$	8,385	$	—	$	44,185
Capital expenditures	$	78	$	—	$	—	$	78

______________________________________

1 Includes the holding company and intercompany eliminations, including the intersegment elimination of interest income and interest expense.

2 Other noninterest expense for Banking includes equipment, net occupancy, professional services, other tax, FDIC and regulatory and merger-related expenses.

Other noninterest expense for Insurance includes equipment, net occupancy and professional services expenses.

ACNB CORPORATION

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of the significant changes in the financial condition, results of operations, comprehensive income, capital resources, and liquidity presented in its accompanying Consolidated Financial Statements for ACNB Corporation, a financial holding company. Please read this discussion in conjunction with the Consolidated Financial Statements and disclosures included herein. Current performance does not guarantee, assure or indicate similar performance in the future.

Forward-Looking Statements

In addition to historical information, this Form 10-Q may contain forward-looking statements. Examples of forward-looking statements include, but are not limited to, (a) projections or statements regarding future earnings, expenses, net interest income, noninterest income, earnings or loss per share, asset mix and quality, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of Management or the Board of Directors, and (c) statements of assumptions, such as economic conditions in the Corporation’s Market Areas. Such forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expects”, “may”, “intends”, “will”, “should”, “anticipates”, or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. Forward-looking statements are subject to certain risks and uncertainties such as national, regional and local economic conditions, competitive factors, and regulatory limitations. Actual results may differ materially from those projected in the forward-looking statements. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: short-term and long-term effects of inflation and rising costs on the Corporation, customers and economy; legislative and regulatory changes; banking system instability caused by failures and continuing financial uncertainty of various banks which may adversely impact the Corporation and its securities and loan values, deposit stability, capital adequacy, financial condition, operations, liquidity, and results of operations; effects of governmental and fiscal policies, as well as legislative and regulatory changes; effects of new laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) and their application with which the Corporation and its subsidiaries must comply; impacts of the capital and liquidity requirements of the Basel III standards or any similar standards; effects of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; ineffectiveness of the business strategy due to changes in current or future market conditions; future actions or inactions of the United States government, including the effects of short-term and long-term federal budget and tax negotiations and a failure to increase the government debt limit or a prolonged shutdown of the federal government; effects of economic conditions particularly with regard to the negative impact of any pandemic, epidemic or health-related crisis and the responses thereto on the operations of the Corporation and current customers, specifically the effect of the economy on loan customers’ ability to repay loans; effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; inflation, securities market and monetary fluctuations; risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities, and interest rate protection agreements, as well as interest rate risks; difficulties in acquisitions and integrating and operating acquired business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; effects of technology changes; effects of general economic conditions and more specifically in the Corporation’s Market Areas; failure of assumptions underlying the establishment of reserves for credit losses and estimations of values of collateral and various financial assets and liabilities; acts of war or terrorism or geopolitical instability; disruption of credit and equity markets; ability to manage current levels of impaired assets; loss of certain key officers; ability to maintain the value and image of the Corporation’s brand and protect the Corporation’s intellectual property rights; continued relationships with major customers; and, potential impacts to the Corporation from continually evolving cybersecurity and other technological risks and attacks, including additional costs, reputational damage, regulatory penalties, and financial losses. Management considers subsequent events occurring after the balance sheet date for matters which may require adjustments to, or disclosure in, the Consolidated Financial Statements. We caution readers not to place undue reliance on these forward-looking statements. They only reflect Management’s analysis as of this date. The Corporation does not revise or update these forward-looking statements to reflect events or changed circumstances. Please carefully review the risk factors described in other documents the Corporation files from time to time with the SEC, including the Annual Reports on Form 10-K and the Quarterly Reports on Form 10-Q. Please also carefully review any Current Reports on Form 8-K filed by the Corporation with the SEC.

Executive Overview

ACNB Corporation is the financial holding company for the wholly-owned subsidiaries of ACNB Bank and ACNB Insurance Services. ACNB Bank provides a full range of retail and commercial financial services in Pennsylvania and Maryland primarily through its network of 33 community banking offices. ACNB Insurance Services offers a broad range of property, casualty, health, life and disability insurance serving personal and commercial clients through office locations in Westminster and Jarrettsville, Maryland, and Gettysburg, Pennsylvania and is licensed to do business in 46 states.

The primary source of the Corporation’s revenues is net interest income derived from interest earned on loans and investments, less deposit and borrowing funding costs. Revenues are influenced by general economic factors, including market interest rates, the economies of the markets served, stock market conditions, as well as competitive forces within the markets. The Corporation also generates revenue through commissions and fees earned on various services and financial products offered to its customers and through gains on sales of assets, such as loans, investments and properties. The Corporation incurs expenses to generate the revenue through provision for credit losses, noninterest expense and income taxes. The Corporation’s overall strategy is to increase loan growth in its local markets, while maintaining a reasonable funding base by offering competitive deposit products and services.

Traditions Acquisition

ACNB closed the Acquisition of Traditions effective February 1, 2025. Traditions contributed, after acquisition accounting adjustments, $877.7 million in assets, $648.5 million in loans and $741.5 million in deposits at the Acquisition date. Financial results for the three months ended March 31, 2025 were impacted by two discrete items that were related to the Acquisition: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million.

The following table presents a summary of the Corporation’s earnings and selected performance and asset quality ratios:


	Three Months Ended March 31,
(Dollars in thousands, except per share data)	2025			2024
Net (loss) income	$	(272)		$	6,768
Diluted (loss) earnings per share	$	(0.03)		$	0.80
Cash dividends declared	$	0.32		$	0.30
Return on average assets (annualized)	(0.04)		%	1.12		%
Return on average equity (annualized)	(0.31)		%	9.76		%
Net interest margin 1	4.07		%	3.77		%
Non-performing assets to total assets	0.32		%	0.18		%
Net charge-offs to average loans outstanding (annualized)	0.01		%	0.00		%
Allowance for credit losses to total loans, net of unearned income	1.06		%	1.21		%

_____________________________________________________________

1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

Summary Financial Results

• Net Loss/Income — Net loss for the three months ended March 31, 2025 was $272 thousand compared to net income of $6.8 million for the same period of 2024, a decrease of $7.0 million. Diluted loss per share for the three months ended March 31, 2025 was $0.03 compared to diluted earnings per share of $0.80 for the same period of 2024.

• Net Interest Income — Net interest income was $27.1 million for the three months ended March 31, 2025 compared to $20.6 million for the same period of 2024, an increase of $6.5 million. The increase in net interest income was driven primarily by the Acquisition.

◦ Net Interest Margin — The Corporation’s FTE net interest margin increased to 4.07% for the three months ended March 31, 2025 compared to 3.77% in the same period of 2024, an increase of 30 bps. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025.

◦ Yield on Average Earning Assets — For the three months ended March 31, 2025, the yield on average earning assets was 5.45%, an increase of 71 bps compared to the same period of 2024 driven primarily by the accretion impact of the acquisition accounting adjustments on loans.

◦ Loan Growth — Average loans increased $499.3 million for the three months ended March 31, 2025 compared to the same period of 2024 driven by the Acquisition.

◦ Deposit Growth — Average interest-bearing deposits increased $421.8 million for the three months ended March 31, 2025 compared to the same period of 2024, driven primarily by the Acquisition.

• Asset Quality — The provision for credit losses was $6.0 million and the reversal of the provision for unfunded commitments was $480 thousand for the three months ended March 31, 2025 c ompared to the provision for credit losses of $223 thousand and a $151 thousand reversal of the provision for unfunded commitments for the same period of 2024.

◦ The allowance for credit losses was $24.6 million at March 31, 2025 compared to $17.3 million at December 31, 2024. The increase was driven primarily by an initial allowance for credit losses of $5.5 million for non-PCD loans and $1.5 million for accruing PCD loans at the Acquisition date.

◦ Non-performing loans were $10.0 million, or 0.43%, of total loans at March 31, 2025 compared to $6.8 million, or 0.40%, of total loans at December 31, 2024. The increase was driven primarily by the Acquisition.

◦ Annualized net charge-offs for the three months ended March 31, 2025 were 0.01% of total average loans compared to 0.00% for the same period of 2024.

• Noninterest income — Noninterest income was $7.2 million for the three months ended March 31, 2025, an increase of $1.5 million from $5.7 million for the same period of 2024. The increase was driven primarily by the Acquisition, an increase in wealth management income and an increase in life insurance proceeds.

• Noninterest expenses — Noninterest expenses increased to $29.3 million for the three months ended March 31, 2025 compared to $17.7 million in the same period of 2024. The increase was driven primarily by the Acquisition.

A more thorough discussion of the Corporation’s results of operations and financial condition is included in the following pages.

CRITICAL ACCOUNTING POLICIES

The accounting policies that the Corporation’s management deems to be most important to the portrayal of its financial condition and results of operations, and that require management’s most difficult, subjective or complex judgment, often result in the need to make estimates about the effect of such matters which are inherently uncertain. The following accounting estimate is deemed to be critical by management:

Allowance for Credit Losses — The ACL represents an amount which, in management’s judgment, is adequate to absorb expected credit losses on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions and prepayment experience. The ACL is measured and recorded upon the initial recognition of a financial asset. The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for credit losses, which is recorded as a current period operating expense.

Determination of an appropriate ACL is inherently complex and requires the use of significant and highly subjective estimates. The reasonableness of the ACL is reviewed quarterly by management.

Management believes it uses relevant information available to make determinations about the ACL and that it has established the existing allowance in accordance with GAAP. However, the determination of the ACL requires significant judgment, and estimates of expected credit losses in the loan portfolio can vary from the amounts actually observed. While management uses available information to recognize expected credit losses, future additions to the ACL may be necessary based on changes in the loans comprising the portfolio, changes in the current and forecasted economic conditions, changes in the interest rate environment which may directly impact prepayment and curtailment rate assumption, and changes in the financial condition of borrowers.

RESULTS OF OPERATIONS

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Net loss for the three months ended March 31, 2025 was $272 thousand, or $0.03 diluted loss per share, compared to net income of $6.8 million, or $0.80 diluted earnings per share for the same period of 2024, a decrease of $7.0 million, or $0.83 diluted earnings per share. The decrease in net income for the three months ended March 31, 2025 was impacted by two discrete items that were related to the Acquisition of Traditions: a provision for credit losses on non-PCD loans of $4.2 million, net of taxes, and merger-related expenses, net of taxes, totaling $6.2 million.

Net Interest Income

Net interest income totaled $27.1 million for the three months ended March 31, 2025 compared to $20.6 million for the same period of 2024, an increase of $6.5 million. The FTE net interest margin for the three months ended March 31, 2025 was 4.07%, a 30 bps increase from 3.77% for the same period of 2024. The increase in FTE net interest income and margin was driven primarily by the Acquisition. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025. The Corporation manages the risk associated with changes in interest rates through the techniques described within Item 3, “Quantitative and Qualitative Disclosures About Market Risk” in this Quarterly Report on Form 10-Q.

The following table provides a comparative average balance sheet and net interest income analysis for the periods presented. The discussion following the table is based on these taxable-equivalent amounts.


	Three Months Ended March 31,
	2025						2024
(Dollars in thousands)	Average Balance		Interest 1		Yield/ Rate		Average Balance		Interest 1		Yield/ Rate
ASSETS
Loans:
Taxable	$	2,080,231	$	31,676	6.18	%	$	1,573,109	$	21,470	5.49	%
Tax-exempt	57,969		370		2.59		65,825		404		2.47
Total Loans 2	2,138,200		32,046		6.08		1,638,934		21,874		5.37
Investment Securities:
Taxable	447,986		3,242		2.93		467,466		3,151		2.71
Tax-exempt	54,659		365		2.71		54,740		359		2.64
Total Investments 3	502,645		3,607		2.91		522,206		3,510		2.70
Interest-bearing deposits with banks	73,181		792		4.39		54,156		750		5.57
Total Earning Assets	2,714,026		36,445		5.45		2,215,296		26,134		4.74
Cash and due from banks	20,603						20,540
Premises and equipment	29,903						26,102
Other assets	224,522						187,075
Allowance for credit losses	(19,939)						(19,963)
Total Assets	$	2,969,115					$	2,429,050

LIABILITIES
Interest-bearing demand deposits	$	573,341	$	524	0.37	%	$	512,701	$	264	0.21	%
Money markets	447,297		1,984		1.80		248,297		536		0.87
Savings deposits	331,103		27		0.03		335,215		29		0.03
Time deposits	410,749		3,461		3.42		244,481		1,331		2.19
Total Interest-Bearing Deposits	1,762,490		5,996		1.38		1,340,694		2,160		0.65
Short-term borrowings	38,721		294		3.08		47,084		339		2.90
Long-term borrowings	257,558		2,910		4.58		248,701		2,882		4.66
Total Borrowings	296,279		3,204		4.39		295,785		3,221		4.38
Total Interest-Bearing Liabilities	2,058,769		9,200		1.81		1,636,479		5,381		1.32
Noninterest-bearing demand deposits	512,966						486,648
Other liabilities	36,934						26,904
Stockholders’ Equity	360,446						279,019
Total Liabilities and Stockholders’ Equity	$	2,969,115					$	2,429,050
Taxable Equivalent Net Interest Income			27,245						20,753
Taxable Equivalent Adjustment			(155)						(160)
Net Interest Income			$	27,090					$	20,593
Cost of Funds					1.45	%					1.02	%
FTE Net Interest Margin					4.07	%					3.77	%

________________________________________

1 Income on interest-earning assets has been computed on a fully taxable equivalent basis using the 21% federal income tax statutory rate.

2 Average balances include non-accrual loans and are net of unearned income.

3 Average balance of investment securities is computed at fair value.

The following table analyzes the relative impact on FTE net interest income attributed to changes in the volume of interest-earning assets and interest-bearing liabilities and changes in yields and rates for the three months ended March 31, 2025 compared to the same period in 2024 :


	2025 versus 2024
(Dollars in thousands)	Volume		Yield/Rate 1		Net
INTEREST EARNING ASSETS
Loans
Taxable	$	6,865	$	3,341	$	10,206
Tax-exempt	(48)		14		(34)
Total Loans 2	6,817		3,355		10,172
Securities
Taxable securities	(130)		221		91
Tax-exempt securities	(1)		7		6
Total Securities	(131)		228		97
Interest-bearing deposits with banks	261		(219)		42
Total	$	6,947	$	3,364	$	10,311
INTEREST-BEARING LIABILITIES
Interest-bearing demand deposits	$	31	$	229	$	260
Money markets	427		1,021		1,448
Savings deposits	—		(2)		(2)
Time deposits	898		1,232		2,130
Total Interest-Bearing Deposits	1,356		2,480		3,836
Short-term borrowings	(60)		15		(45)
Long-term borrowings	102		(74)		28
Total Borrowings	42		(59)		(17)
Total	1,398		2,421		3,819
Change in Net Interest Income	$	5,549	$	943	$	6,492

________________________________________

1 The effect of changing volume and rate, which cannot be segregated, has been allocated entirely to the rate column.

2 Based on average balances and includes non-accrual loans and are net of unearned income.

The increases in FTE interest income and interest expense were primarily driven by the Acquisition. Total FTE interest income increased $10.3 million during the three months ended March 31, 2025 compared to the same period of 2024. ACNB experienced a $6.9 million increase in FTE interest income due to an increase in the average balance of interest earning assets and $3.4 million attributable to an increase in the yield on interest earning assets. FTE interest income on total loans increased $10.2 million compared to the same period of 2024. The yield on total loans increased 71 bps, contributing $3.4 million to the increase. Average loans increased $499.3 million contributing $6.8 million to the increase in FTE interest income.

Total interest expense increased $3.8 million during the three months ended March 31, 2025 compared to the same period of 2024. Total average interest-bearing deposits increased $421.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Interest expense increased $2.5 million due to higher rates on interest-bearing deposits and increased $1.4 million as a result of the increase in average interest-bearing deposits. The cost of interest-bearing deposits was 1.38% for the three months ended March 31, 2025, an increase of 73 bps from the three months ended March 31, 2024. The largest increases in rates were in time deposits and money markets which increased 123 and 93 bps, respectively.

The increases to average interest-earning assets and liabilities was driven primarily by the Acquisition. The accretion impact of acquisition accounting adjustments on loans and deposits from the Acquisition was $1.5 million for the three months ended March 31, 2025.

Provision for Credit Losses and Unfunded Commitments

The provision for credit losses was $6.0 million and a reversal of the provision for unfunded commitments was $480 thousand for the three months ended March 31, 2025 compared to a provision for credit losses of $223 thousand and a reversal of the

provision for unfunded commitments of $151 thousand for the same period of 2024. ACNB recorded an allowance for credit losses of $6.9 million at the Acquisition date, comprised of $5.5 million for non-PCD loans, which was recognized through the provision for credit losses, and $1.5 million for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans. The determination of the provisions was a result of the analysis of the adequacy of the ACL and unfunded commitments calculations. Each quarter, the Corporation assesses risks and reserves required compared with the balances in the allowance for credit losses and unfunded commitments.

Noninterest Income

The following table presents the components of noninterest income:


	Three Months Ended March 31,				Increase (Decrease)
(In thousands)	2025		2024		$		%
NONINTEREST INCOME
Insurance commissions	$	2,147	$	2,115	$	32	1.5	%
Service charges on deposits	1,094		991		103		10.4
Wealth management	1,060		962		98		10.2
Gain from mortgage loans held for sale	855		48		807		N/M
ATM debit card charges	831		819		12		1.5
Earnings on investment in bank-owned life insurance	580		477		103		21.6
Gain on life insurance proceeds	254		—		254		100.0
Net gains on sales or calls of investment securities	—		69		(69)		(100.0)
Net gains (losses) on equity securities	14		(10)		24		N/M



Other	349		196		153		78.1
Total Noninterest Income	$	7,184	$	5,667	$	1,517	26.8	%

Total noninterest income was $7.2 million for the three months ended March 31, 2025 compared to $5.7 million for the same period of 2024. The increase was driven primarily by the Acquisition unless noted otherwise. The more significant fluctuations by category are explained below:

• Service charges on deposits totaled $1.1 million for the three months ended March 31, 2025, an increase of $103 thousand compared to the same period of 2024.

• Wealth management income for the three months ended March 31, 2025 increased $98 thousand compared to the same period of 2024 driven primarily by increased sales activity and market performance.

• Gain from mortgage loans held for sale totaled $855 thousand compared to $48 thousand in the same period of 2024.

• Earnings on investment in bank-owned life insurance increased $103 thousand from the same period of 2024.

• Gain on life insurance proceeds was $254 thousand for the three months ended March 31, 2025 as a result of a death benefit paid on a life insurance policy.

Noninterest Expenses

The following table presents the components of noninterest expense:


	Three Months Ended March 31,				Increase (Decrease)
(In thousands)	2025		2024		$		%
NONINTEREST EXPENSES
Salaries and employee benefits	$	12,861	$	11,168	$	1,693	15.2	%
Equipment	2,280		1,729		551		31.9
Net occupancy	1,442		1,130		312		27.6
Professional services	577		616		(39)		(6.3)
Other tax	527		370		157		42.4
FDIC and regulatory	401		375		26		6.9
Intangible assets amortization	857		321		536		N/M


Merger-related	8,031		—		8,031		100.0

Other	2,359		1,953		406		20.8
Total Noninterest Expenses	$	29,335	$	17,662	$	11,673	66.1	%

Noninterest expenses increased $11.7 million for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition. The more significant fluctuations by category are explained below:

• Salaries and employee benefits, the largest component of noninterest expenses, increased $1.7 million during the three months ended March 31, 2025 to $12.9 million compared to $11.2 million in the same period of 2024. The increase was driven primarily by higher base wages as a result of the Acquisition, higher restricted stock compensation and higher payroll taxes.

• Equipment expenses increased $551 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition.

• Other tax increased $157 thousand for the three months ended March 31, 2025 compared to the same period of 2024.

• Net occupancy increased $312 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven primarily by the Acquisition and increased seasonal maintenance.

• Intangible assets amortization increased $536 thousand for the three months ended March 31, 2025 compared to the same period of 2024 driven by the Acquisition.

• Merger-related expenses include legal, external accounting, loan review, advisory fees, severance and change in control expenses incurred for the Acquisition.

Provision for Income Taxes

The Corporation recognized an income tax benefit of $277 thousand during the three months ended March 31, 2025 compared to a provision for income taxes of $1.8 million during the same period of 2024. The income tax benefit for the three months ended March 31, 2025 was due to the net loss driven by the Acquisition. Any variances from the federal statutory rate of 21% are generally due to tax-free income, which includes interest income on tax-free loans and investment securities and income from bank-owned life insurance policies, federal income tax credits, and the impact of non-tax deductible expense. Additionally, ACNB has incurred non-deductible costs related to the Acquisition which are recorded within merger-related costs on the Consolidated Statements of (Loss) Income.

FINANCIAL CONDITION

Assets totaled $3.27 billion at March 31, 2025 and $2.39 billion at December 31, 2024. The Acquisition contributed $877.7 million to total assets.

Investment Securities

ACNB uses investment securities to manage interest rate risk, provide collateral for certain funding products, provide liquidity and generate interest and dividend income. The investment portfolio is comprised of U.S. Government and agencies, mortgage-backed, state and municipal, and corporate securities. These securities provide the appropriate characteristics with respect to credit quality, yield and maturity relative to the management of the overall balance sheet.

Total investment securities were $521.3 million at March 31, 2025 compared to $459.5 million at December 31, 2024, an increase of 13.5%. Following the Acquisition date, ACNB completed the sale of approximately $98.0 million of investment securities previously held by Traditions with a yield of 5.03%. ACNB paid off $40.2 million of Traditions’ FHLB borrowings with a cost of 4.73% with the proceeds from the sale of the investment securities, and invested the remainder of the proceeds into investment securities with a yield of 5.07%. At March 31, 2025, the securities balance included a net unrealized loss on AFS securities of $31.8 million on amortized cost of $495.5 million compared to a net unrealized loss of $38.2 million on amortized cost of $441.6 million at December 31, 2024. At March 31, 2025, the securities balance included HTM securities with an amortized cost of $64.6 million and a fair value of $56.2 million as compared to an amortized cost of $64.6 million and a fair value of $56.9 million at December 31, 2024.

The Corporation does not own investments consisting of pools of Alt-A or subprime mortgages, private label mortgage-backed securities, or trust preferred investments.

Loans

The following table presents the composition of the loan portfolio as follows:


					Increase (Decrease)
(In thousands)	March 31, 2025		December 31, 2024		$		%
Commercial real estate	$	1,254,402	$	969,514	$	284,888	29.4	%
Residential mortgage	591,488		401,950		189,538		47.2
Commercial and industrial	220,774		140,906		79,868		56.7
Home equity lines of credit	119,085		85,685		33,400		39.0
Real estate construction	127,663		76,773		50,890		66.3
Consumer	10,526		9,318		1,208		13.0
Gross loans	2,323,938		1,684,146		639,792		38.0
Unearned income	(1,729)		(1,236)		(493)		(39.9)
Total loans, net of unearned income	$	2,322,209	$	1,682,910	$	639,299	38.0	%

Total loans, net of unearned income, outstanding increased $639.3 million, or 38.0%, from December 31, 2024 to March 31, 2025. The increase was driven primarily by the Acquisition. ACNB acquired $648.5 million in loans at the Acquisition date. As of March 31, 2025, total acquisition accounting adjustments on loans were $24.5 million. The majority of the loan acquisition accounting adjustments are expected to accrete back through as income as loans pay off or mature. ACNB does not have a significant concentration of credit risk with any single borrower, industry or geographic location. Most of the Corporation’s lending activities are with customers located within the Bank’s Market Area.

The commercial real estate portfolio, which includes farmland, multifamily, owner-occupied and non-owner occupied commercial real-estate, grew $284.9 million, or 29.4%, in 2025. The following data related to the commercial real estate portfolio through the breakout charts excludes the impact of the acquisition accounting adjustments on loans. The collateral for these loans is primarily spread across Pennsylvania and Maryland, 65.3% and 32.5%, respectively, at March 31, 2025, compared to 56.0% and 42.1%, respectively, at December 31, 2024. Less than 3% of the portfolio is for real estate in Urban areas of Baltimore, Maryland and Philadelphia, Pennsylvania. The largest sectors of the commercial real estate portfolio are retail and mixed-use commercial rental units, office complexes and hotels, motels and bed and breakfast entities. Non-owner occupied commercial real estate represented 66.3% of the commercial real estate portfolio. Non-owner occupied commercial real estate borrowers are geographically dispersed throughout ACNB’s Market Area and are leasing commercial properties to a varied group of tenants including medical offices, retail space, and other commercial purpose facilities. Because of the varied

nature of the tenants, in aggregate, management believes that these loans present an acceptable risk when compared to commercial loans in general.

The following chart details the percentage of the various categories included in the portfolio:

_____________________________________________________________

1 Constitutes over 40 loan categories that do not fit into the categories presented above.

The concentration of non-owner occupied commercial real estate, construction, and multi-family was 253.1% of total risk-based capital of the Bank as of March 31, 2025 compared to 207.0% of total risk-based capital of the Bank as of December 31, 2024. The increase was a result of the addition of Traditions’ portfolio.

Residential real estate mortgages totaled $591.5 million, an increase of $189.5 million, or 47.2%, in 2025. Included in the residential real estate mortgages were $56.4 million in junior liens. Junior liens inherently have more credit risk by virtue of the fact that another financial institution may have a senior security position in the case of foreclosure liquidation of collateral to extinguish the debt.

Commercial and industrial loans totaled $220.8 million, an increase of $79.9 million, or 56.7% in 2025. This segment includes loans to school districts, municipalities (including townships) and essential purpose authorities. In many cases, these loans are obtained through a bid process that includes other local and regional banks and are especially subject to refinancing in certain rate environments.

Allowance for Credit Losses and Asset Quality

The ACL at March 31, 2025 was $24.6 million, or 1.06% of total loans, net of unearned income as compared to $17.3 million, or 1.03% of loans, at December 31, 2024 and $20.2 million, or 1.21% of loans, at March 31, 2024. The increase of $7.4 million compared to December 31, 2024 and $4.5 million compared to March 31, 2024 was driven primarily by an initial $5.5 million allowance for credit losses for non-PCD loans, which was recognized through the provision for credit losses, and a $1.5 million allowance for credit losses for accruing PCD loans, which was recognized as an acquisition accounting adjustment to the amortized cost basis of the acquired loans, at the Acquisition date.

Changes in the ACL were as follows for the periods presented:


	Three months ended March 31
(In thousands)	2025			2024
Beginning balance	$	17,280		$	19,969
Allowance established for acquired PCD loans	1,464			—
Provision for credit losses	5,968			223
Loans charged-off	(85)			(60)
Recoveries on charged-off loans	19			40
Ending balance	$	24,646		$	20,172

Net charge-offs to average loans (annualized)	0.01		%	—		%
Allowance for credit losses to total loans	1.06		%	1.21		%

Nonaccrual loans increased $2.2 million during the three months ended March 31, 2025 driven primarily by the Acquisition. Information on nonaccrual loans, by collateral type rather than loan segment, at March 31, 2025, as compared to December 31, 2024, is as follows:


(Dollars in thousands)	Number of Credit Relationships	Balance		Current Specific Loss Allocations		Current Year Charge-Offs		Location	Originated
March 31, 2025

Owner occupied commercial real estate	16	$	5,441	$	77	$	—	In market	2006-2023
Commercial and industrial	5	2,613		512		—		In market	2009-2023
Home equity lines of credit	1	8		—		—		In market	2021
Total	22	$	8,062	$	589	$	—

December 31, 2024

Owner occupied commercial real estate	6	$	3,564	$	138	$	—	In market	2006-2022

Commercial and industrial	4	2,307		569		—		In market	2009-2023

Total	10	$	5,871	$	707	$	—

All nonaccrual loans are to borrowers located within ACNB’s Market Area and were originated by ACNB’s banking subsidiary or were part of the Acquisition and were originated by Traditions’ banking subsidiary.

Deposits

Deposits were comprised of the following for the periods presented:


					Increase (Decrease)
(In thousands)	March 31, 2025		December 31, 2024		$		%
Noninterest-bearing demand deposits	$	562,700	$	451,503	$	111,197	24.6	%
Interest-bearing demand deposits	609,187		505,096		104,091		20.6
Money market	549,704		251,667		298,037		118.4
Savings	341,291		311,207		30,084		9.7
Total demand and savings	2,062,882		1,519,473		543,409		35.8
Time	477,127		273,028		204,099		74.8
Total deposits	$	2,540,009	$	1,792,501	$	747,508	41.7	%

ACNB relies on deposits as a primary source of funds for lending activities with total deposits of $2.54 billion as of March 31, 2025. Deposits increased by $747.5 million, or 41.7%, from December 31, 2024 to March 31, 2025 driven primarily by the

Acquisition. ACNB acquired $741.5 million in deposits at the Acquisition date. Historically, deposit balances fluctuate reflecting different balance levels held by local companies, government units and school districts during different times of the year. Included in total deposits at March 31, 2025 were municipal deposits totaling $137.2 million, or 5.4%, compared to $111.0 million, or 6.2%, at December 31, 2024. Time deposits increased $204.1 million, or 74.8%. Time deposits include brokered deposits totaling $54.0 million at March 31, 2025 compared to $24.1 million at December 31, 2024. In January 2025, ACNB Bank issued $20.0 million in brokered time deposits to offset seasonal fluctuations in commercial deposits during the quarter, and as a result of the Acquisition , ACNB assumed $15.0 million of brokered time deposits of which $5.0 million matured in February 2025. The loan-to-deposit ratio was 91.43% at March 31, 2025 compared to 93.89% at December 31, 2024.

ACNB’s deposit pricing function employs a disciplined pricing approach based upon liquidity needs and alternative funding rates, but also strives to price deposits to be competitive with relevant local competition, including local government investment trusts, credit unions and larger regional banks. Based on total Bank deposits outstanding, consumer and commercial constituted approximately 61% and 39%, respectively, of total Bank deposits as of March 31, 2025 compared to approximately 63% and 37%, respectively, as of December 31, 2024. The ratio of uninsured and non-collateralized Bank deposits to total Bank deposits was approximately 19.7% at March 31, 2025. As of March 31, 2025, cash on hand, the fair value of unencumbered investment securities and collateralized borrowing capacities at the FHLB and the Federal Reserve discount window at the Bank were 242.3% of uninsured and non-collateralized Bank deposits. At March 31, 2025, deposits from the 20 largest unrelated depositors, excluding internal accounts, of the Bank totaled $187.0 million, or 7.3%, of total Bank deposits compared to $143.4 million, or 7.9%, of total Bank deposits at December 31, 2024 .

Borrowings

Short-term borrowings are comprised primarily of securities sold under agreements to repurchase and short-term borrowings from the FHLB. As of March 31, 2025, short-term borrowings were $44.2 million, an increase of $28.4 million compared to $15.8 million at December 31, 2024. Agreements to repurchase accounts are within the commercial and local government customer base and have attributes similar to core deposits. Investment securities are pledged in sufficient amounts to collateralize these agreements. Compared to December 31, 2024, securities sold under repurchase agreements balances decreased by $1.8 million, or 11.2%, due to normal changes in the cash flow position of ACNB’s commercial and local government customer base. Short-term FHLB advances at March 31, 2025 were $25.0 million compared to none at December 31, 2024. Short-term FHLB borrowings are used for general balance sheet management.

Long-term borrowings consist of longer-term advances from the FHLB, trust preferred subordinated debt and subordinated debt and totaled $255.3 million at March 31, 2025 and at December 31, 2024. Further borrowings will be used when necessary for a variety of risk management and funding purposes. Please refer to the Liquidity discussion below for more information on the Corporation’s ability to borrow.

Capital

ACNB’s capital management strategies have been developed to provide an appropriate rate of return, in the opinion of management, to shareholders, while maintaining levels above its internal minimums and “well-capitalized” regulatory position in relationship to its risk exposure. Total stockholders’ equity was $386.9 million at March 31, 2025 compared to $303.3 million at December 31, 2024. The primary driver of the increase to stockholders’ equity was the issuance of 2,035,246 shares of common stock, or $83.6 million, to acquire Traditions. Other impacts to stockholders’ equity during the quarter were due to a $6.4 million change in unrealized gains in AFS investment securities, cash dividends paid to ACNB Corporation stockholders of $3.4 million, a net loss of $272 thousand and common stock repurchases of $3.1 million.

ACNB Corporation has a Dividend Reinvestment and Stock Purchase Plan that provides registered holders of ACNB Corporation common stock with a convenient way to purchase additional shares of common stock by permitting participants in the plan to automatically reinvest cash dividends on all or a portion of the shares owned and to make quarterly voluntary cash payments under the terms of the plan. Participation in the plan is voluntary, and there are eligibility requirements to participate in the plan. During the three months ended March 31, 2025, 6,470 shares were issued under this plan with proceeds in the amount of $267 thousand.

Regulatory Capital

The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain OBS

items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Minimum regulatory capital requirements established by Basel III rules require the Corporation and the Bank to:

• Meet a minimum Tier 1 leverage capital ratio of 4.0% of average assets;

• Meet a minimum Common Equity Tier 1 capital ratio of 4.5% of risk-weighted assets;

• Meet a minimum Tier 1 capital ratio of 6.0% of risk-weighted assets;

• Meet a minimum Total capital ratio of 8.0% of risk-weighted assets;

• Maintain a “capital conservation buffer” of 2.5% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonus; and,

• Comply with the definition of capital to improve the ability of regulatory capital instruments to absorb losses.

The capital ratios are as follows:


	Actual		For Capital Adequacy Purposes 1		To Be Well Capitalized Under Prompt Corrective Action Regulations 2
March 31, 2025
Tier 1 Leverage Capital (to average assets)
ACNB Corporation	11.81	%	4.00	%	N/A
ACNB Bank	11.50	%	4.00	%	5.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)
ACNB Corporation	13.65	%	4.50	%	N/A
ACNB Bank	13.58	%	4.50	%	6.50	%
Tier 1 Capital (to risk-weighted assets)
ACNB Corporation	13.86	%	6.00	%	N/A
ACNB Bank	13.58	%	6.00	%	8.00	%
Total Capital (to risk-weighted assets)
ACNB Corporation	15.45	%	8.00	%	N/A
ACNB Bank	14.57	%	8.00	%	10.00	%













December 31, 2024
Tier 1 Leverage Capital (to average assets)
ACNB Corporation	12.52	%	4.00	%	N/A
ACNB Bank	12.03	%	4.00	%	5.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)
ACNB Corporation	16.27	%	4.50	%	N/A
ACNB Bank	16.03	%	4.50	%	6.50	%
Tier 1 Capital (to risk-weighted assets)
ACNB Corporation	16.56	%	6.00	%	N/A
ACNB Bank	16.03	%	6.00	%	8.00	%
Total Capital (to risk-weighted assets)
ACNB Corporation	18.36	%	8.00	%	N/A
ACNB Bank	17.02	%	8.00	%	10.00	%

________________________________________

1 Ratios do not include capital conservation buffer.

2 N/A - Not applicable as “well capitalized” applies only to banks.

Liquidity

Effective liquidity management ensures the cash flow requirements of depositors and borrowers as well as the operating cash needs of ACNB are met. ACNB’s funds are available from a variety of sources, including assets that are readily convertible such as interest-bearing deposits wit h banks, maturities and repayments from the securities portfolio, scheduled repayments of loans receivable, the core deposit bas e, the ability to raise brokered deposits, and the ability to borrow from the FHLB, Federal Reserve Discount Window and unsecured Federal Funds line providers.

At March 31, 2025, ACNB’s banking subsidiary had borrowing capacity of approximately $950.9 million from the FHLB, of which $688.6 million was available. At March 31, 2025, ACNB’s banking subsidiary could borrow approximately $61.4 million from the Discount Window, of which the full amount was available. The underlying collateral at the Discount Window is made up of eligible loan collateral held in a joint-custody account under the Bank’s name.

ACNB’s banking subsidiary maintains several unsecured Fed Funds lines with correspondent banks. As of March 31, 2025, Fed Funds line capacity at the banking subsidiary was $192.0 million, of which the full amount was available. ACNB Corporation maintains a $5.0 million unsecured line of credit with a correspondent bank, all of which was available for borrowing as of March 31, 2025. The Corporation also executed a guaranty for a note related to a $1.5 million commercial line of credit from a local bank, with customary terms and conditions for such a line, for ACNB Insurance Services, the borrower and a wholly-owned subsidiary of ACNB Corporation. The commercial line of credit is for general working capital needs as they arise by ACNB Insurance Services and did not have any outstanding balance as of March 31, 2025.

Another source of liquidity is securities sold under repurchase agreements to customers of ACNB’s banking subsidiary totaling approximately $14.1 million and $15.8 million at March 31, 2025, and December 31, 2024, respectively. These agreements vary in balance according to the cash flow needs of customers and competing accounts at other financial organizations.

The liquidity of the parent company also represents an important aspect of liquidity management. The parent company’s cash outflows consist principally of dividends to shareholders and corporate expenses. The main source of funding for the parent company is the dividends it receives from its subsidiaries. Federal and state banking regulations place certain legal restrictions and other practicable safety and soundness restrictions on dividends paid to the parent company from the subsidiary bank.

ACNB manages liquidity by monitoring projected cash inflows and outflows on a daily basis, and believes it has sufficient funding sources to maintain sufficient liquidity under varying degrees of business conditions for liquidity and capital resource requirements for all material short- and long-term cash requirements from known contractual and other obligations.

Off-Balance Sheet Arrangements

The Corporation is party to financial instruments with OBS risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and, to a lesser extent, standby letters of credit. At March 31, 2025, the Corporation had unfunded outstanding commitments to extend credit of $569.1 million and outstanding standby letters of credit of $25.2 million. Because these commitments generally have fixed expiration dates and many will expire without being drawn upon, the total commitment level does not necessarily represent future cash requirements.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of ACNB’s ALCO, with direct oversight from the Board, is to maximize net interest income within established policy parameters. This objective is accomplished through the management of balance sheet composition and duration, market risk exposures arising from changing economic conditions, and liquidity risk.

Market risk comprises exposure to interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant market rate or price risks. Specific to the banking industry, one of the greatest risk exposures is to that of changing market interest rates. The primary objective of monitoring ACNB’s interest rate sensitivity risk is to provide management the flexibility necessary to manage the statement of condition to minimize adverse changes in net interest income as a result of changes in the direction and level of interest rates. FOMC monetary policy, economic uncertainty, and fiscal policy changes have been significant factors affecting the task of managing interest rate sensitivity positions in recent years.

ACNB’s ALCO is a management committee responsible for monitoring and managing interest rate risk within approved policy limits utilizing earnings sensitivity simulation and economic value-at-risk models. These models are highly dependent on various assumptions, which change regularly as the statement of condition composition and market interest rates change. The key assumptions and strategies employed are analyzed, reviewed and documented at least annually by the ALCO as well as provided to the Board.

Interest Rate Risk

Interest rate risk is the exposure to fluctuations in the Bank’s future earnings (earnings at risk) and value (value at risk) resulting from changes in interest rates. This exposure results from differences between the amounts of interest-earning assets and interest-bearing liabilities that reprice within a specified time period as a result of scheduled maturities, scheduled and unscheduled repayments, the propensity of borrowers and depositors to react to changes in their economic interests, and contractual loan interest rate changes.

Management attempts to manage the level of repricing and maturity mismatch through its asset/liability management processes so that fluctuations in net interest income are maintained within policy limits across a range of market conditions while satisfying liquidity and capital requirements. Management recognizes that a certain amount of interest rate risk is inherent, appropriate, and necessary to ensure the Bank’s profitability. Thus, the goal of the Bank’s interest rate risk management is to minimize the fluctuations of net interest income across all interest rate scenarios.

Management endeavors to control the exposure to changes in interest rates by understanding, reviewing, and making decisions based on its risk position. The Bank primarily uses its securities portfolio, FHLB advances, derivatives and brokered deposits to manage its interest rate risk position. Additionally, pricing, promotion, and product development activities are directed in an effort to emphasize the loan and deposit repricing characteristics that best meet current interest rate risk objectives.

ACNB uses simulation analysis to assess earnings at risk and net present value analysis to assess value at risk. These methods allow management to regularly monitor both the direction and magnitude of its interest rate risk exposure. These analyses require numerous assumptions including, but are not limited to, changes in statement of condition mix, prepayment rates on loans and securities, cash flows and repricing of all financial instruments, changes in volumes and pricing, future shapes of the yield curve, relationship of market interest rates to each other (basis risk), credit spread, and deposit sensitivity. Assumptions are based on management’s best estimates, but may not accurately reflect actual results under certain changes in interest rates due to the timing, magnitude, and frequency of rate changes and changes in market conditions and management strategies, among other factors. However, the analyses are useful in quantifying risk and providing a relative gauge of the Corporation’s interest rate risk position over time.

ACNB’s ALCO operates under management policies, approved by the Board, which define guidelines and limits on the level of risk. ALCO meets regularly and reviews its interest rate risk position and monitors various liquidity ratios to ensure a satisfactory liquidity position. By utilizing the analyses, management can determine changes that may need to be made to the asset and liability mixes to mitigate the change in net interest income under various interest rate scenarios. Management continually evaluates the condition of the economy, the pattern of market interest rates, and other economic data to inform the committee. Regulatory authorities also monitor the Corporation’s interest rate risk position along with other liquidity ratios.

Net Interest Income Sensitivity

Simulation analysis evaluates the effect of upward and downward changes in market interest rates on future net interest income. The analysis involves changing the interest rates used in determining net interest income over the next twelve months. The resulting percentage change in net interest income in various rate scenarios is an indication of Corporation’s short-term interest rate risk. The analysis assumes recent pricing trends in new loan and deposit volumes will continue while balances remain constant. Additional assumptions are applied to modify pricing under the various rate scenarios.

The simulation analysis results are presented in the table below. At March 31, 2025, results in the falling interest rate scenario project a decrease in net interest income. The Bank is currently modestly asset-sensitive according to the model as interest-earning assets are expected to reprice faster than interest-bearing liabilities.


12-Month Earnings at Risk Ramps
	% Change in Net Interest Income
Change in Market Interest Rates (bps)	March 31, 2025		December 31, 2024		Policy Limits
(200)	(0.9)	%	(1.7)	%	(10.0)	%
(100)	(0.6)	%	(1.0)	%	(5.0)	%
100	0.3	%	0.3	%	(5.0)	%
200	0.1	%	(0.3)	%	(10.0)	%

Economic Value

Net present value analysis provides information on the risk inherent in the statement of condition that might not be considered in the simulation analysis due to the short time horizon used. The net present value of the statement of condition incorporates the discounted present value of expected asset cash flows minus the discounted present value of expected liability cash flows. The analysis involves changing the interest rates used in determining the expected cash flows and in discounting the cash flows. The resulting percentage change in net present value in various rate scenarios is an indication of the longer-term repricing risk and options embedded in the statement of condition.

The results at March 31, 2025 and December 31, 2024 are reflected in the following table. Funding cost and repricing speed will continue to be a factor in the results of the model. The behavior of the business and retail clients also varies across the rate scenarios, which is reflected in the results. To improve comparability across periods, the Bank strives to follow best practices related to the assumption setting and maintains the size and mix of the period end statement of condition; thus, the results do not reflect actions management may take through the normal course of business that would impact results.


Value at Risk Ramps
	% Change in Market Value
Change in Market Interest Rates (bps)	March 31, 2025		December 31, 2024		Policy Limits
(200)	(11.9)	%	(10.8)	%	(35.0)%
(100)	(4.7)	%	(3.7)	%	(20.0)%
100	0.1	%	(1.2)	%	(20.0)%
200	(1.4)	%	(4.8)	%	(35.0)%

ITEM 4 – CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Corporation carried out an evaluation, under the supervision and with the participation of its management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in periodic SEC filings.

Disclosure controls and procedures are Corporation controls and other procedures that are designed to ensure that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in the Corporation’s internal control over financial reporting during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

PART II – OTHER INFORMATION

ACNB CORPORATION

ITEM 1 – LEGAL PROCEEDINGS

As of March 31, 2025, there were no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which ACNB or its subsidiaries are a party or by which any of their assets are the subject, which could have a material adverse effect on ACNB or its subsidiaries or their results of operations. In addition, no material proceedings are pending or are known to be threatened or contemplated against the Corporation or its subsidiaries by governmental authorities.

ITEM 1A – RISK FACTORS

There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 except as described below:

Changes to trade policies and tariffs can have an adverse impact on our business and our customers.

Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets we serve. Our customers-particularly local businesses engaged in agriculture, manufacturing, and retail-may face higher costs for imported goods and materials, reduced export demand, and supply chain disruptions due to increased tariffs. These challenges could lead to lower revenues, reduced profitability, and potential layoffs, all of which may impair our customers' ability to meet their financial obligations. Furthermore, prolonged trade tensions and economic uncertainty could lead to market volatility, declining asset values, and weakened consumer confidence. If our customers experience financial stress, we could see an increase in loan delinquencies and credit losses, negatively affecting our asset quality and overall financial performance. Additionally, any decline in local economic activity could reduce loan demand, deposit growth, and fee income, which are critical to our long-term success. While we actively monitor economic and policy developments, we cannot predict the outcome of trade negotiations or the full impact of tariffs and trade restrictions on our business, customers, and the broader economy. Any adverse effects from tariffs or a trade war could materially and negatively impact our financial condition, results of operations, and future growth prospects.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 5, 2009, shareholders approved and adopted the amendment to the Articles of Incorporation of ACNB Corporation to authorize up to 20,000,000 shares of preferred stock, par value $2.50 per share. As of March 31, 2025, there were no issued or outstanding shares of preferred stock.

On May 1, 2018, shareholders approved and ratified the ACNB Corporation 2018 Omnibus Stock Incentive Plan, effective as of March 20, 2018, in which awards shall not exceed, in the aggregate, 400,000 shares of common stock, plus any shares that were authorized, but not issued, under the ACNB Corporation 2009 Restricted Stock Plan. As of March 31, 2025, there were 177,577 shares issued under this plan. The maximum number of shares that may yet be granted under this plan is 396,478. The Corporation’s Registration Statement under the Securities Act of 1933 on Form S-8 for the ACNB Corporation 2018 Omnibus Stock Incentive Plan was filed with the Securities and Exchange Commission on March 8, 2019. In addition, on March 8, 2019, the Corporation filed Post-Effective Amendment No. 1 to the Registration Statement on Form S-8 for the ACNB Corporation 2009 Restricted Stock Plan to add the ACNB Corporation 2018 Omnibus Stock Incentive Plan to the registration statement to reflect that the remaining unissued shares under the 2009 Restricted Stock Plan may instead be issued under the 2018 Omnibus Stock Incentive Plan.

On October 24, 2022, the Corporation announced that the Board of Directors approved on October 18, 2022, a new plan to repurchase, in open market and privately negotiated transactions, up to 255,575, or approximately 3%, of the outstanding shares of the Corporation’s common stock. This new common stock repurchase program replaces and supersedes any and all earlier announced repurchase plans. There were 75,872 shares repurchased during the three months ended March 31, 2025. As of March 31, 2025, 143,780 shares of common stock had been repurchased under this plan.

Following is a summary of the Corporation’s purchases of common stock during the first quarter of 2025:


	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plan	Maximum number of shares that may yet be purchased under the plan
January 1 - January 31, 2025	—	$	—	67,908	187,667
February 1 - February 28, 2025	39,005	$	40.55	106,913	148,662
March 1 - March 31, 2025	36,867	$	40.46	143,780	111,795

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES – NOTHING TO REPORT.

ITEM 4 – MINE SAFETY DISCLOSURES – NOT APPLICABLE.

ITEM 5 – OTHER INFORMATION

During the three months ended March 31, 2025, no director or officer of the Corporation adopted or terminated a “Rule 10b5-1 trading agreement” or a “non-Rule 10b5-1 trading agreement” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6 – EXHIBITS

The following exhibits are included in this report:


Exhibit 2.1						Agreement and Plan of Reorganization by and among ACNB Corporation, ACNB South Acquisition Subsidiary, LLC, ACNB Bank, New Windsor Bancorp, Inc., and New Windsor State Bank dated as of November 21, 2016, as amended. (Incorporated by reference to Annex A of the Registrant’s Registration Statement No. 333-215914 on Form S-4, filed with the Commission on February 6, 2017.) Schedules are omitted; the Registrant agrees to furnish copies of Schedules to the Securities and Exchange Commission upon request.

Exhibit 2.2						Amendment No. 2 to Agreement and Plan of Reorganization by and among ACNB Corporation, ACNB South Acquisition Subsidiary, LLC, ACNB Bank, New Windsor Bancorp, Inc., and New Windsor State Bank dated as of April 18, 2017. (Incorporated by reference to Exhibit 2.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, filed with the Commission on August 4, 2017.)

Exhibit 2.3						Agreement and Plan of Reorganization by and among ACNB Corporation, ACNB South Acquisition Subsidiary, LLC, ACNB Bank, Frederick County Bancorp, Inc. and Frederick County Bank dated as of July 1, 2019. (Incorporated by reference to Annex A of the Registrant’s Registration Statement No. 333-233791 on Form S-4, filed with the Commission on September 16, 2019.) Schedules are omitted; the Registrant agrees to furnish copies of Schedules to the Securities and Exchange Commission upon request.

Exhibit 2.4						Agreement and Plan of Reorganization by and among ACNB Corporation, ACNB South Acquisition Subsidiary, LLC, ACNB Bank, Traditions Bancorp, Inc. and Traditions Bank dated as of July 23, 2024. (Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on July 24, 2024.) Schedules are omitted; the Registrant agrees to furnish copies of Schedules to the Securities and Exchange Commission upon request.

Exhibit 3(i)						Amended and Restated Articles of Incorporation of ACNB Corporation. (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on May 7, 2018.)

Exhibit 3(ii)						Amended and Restated Bylaws of ACNB Corporation. (Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on February 21, 2024.)

Exhibit 4.1						Form of ACNB Corporation 4.00% Fixed-to-Floating Rate Subordinated Note due March 31, 2031. (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 30, 2021.)

Exhibit 10.1						ACNB Bank Amended and Restated Executive Supplemental Life Insurance Plan — Applicable to James P. Helt, Douglas A. Seibel and Laurie A. Laub. (Incorporated by reference to Exhibit 10.3 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Commission on March 6, 2015.)

Exhibit 10.2						ACNB Bank Amended and Restated Director Supplemental Life Insurance Plan — Applicable to Kimberly S. Chaney, Frank Elsner, III, Todd L. Herring, Scott L. Kelley, James J. Lott, Donna M. Newell, Daniel W. Potts, D. Arthur Seibel, Jr. and Alan J. Stock. (Incorporated by reference to Exhibit 10.4 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Commission on March 6, 2015.)

Exhibit 10.3						ACNB Bank Amended and Restated Director Deferred Fee Plan — Applicable to Kimberly S. Chaney, Frank Elsner, III, Todd L. Herring, Scott L. Kelley, James J. Lott, Donna M. Newell, D. Arthur Seibel, Jr. and Alan J. Stock. (Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on January 6, 2012.)

Exhibit 10.4						ACNB Bank Salary Savings Plan. (Incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed with the Commission on November 4, 2022.)

Exhibit 10.5						Group Pension Plan for Employees of ACNB Bank. (Incorporated by reference to Exhibit 10.5 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed with the Commission on November 4, 2022.)

Exhibit 10.6						ACNB Corporation 2009 Restricted Stock Plan. (Incorporated by reference to Appendix C of the Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the Commission on March 25, 2009.)


Exhibit 10.7						Salary Continuation Agreement by and between ACNB Bank and James P. Helt dated as of March 28, 2012. (Incorporated by reference to Exhibit 10.20 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Commission on March 7, 2014.)

Exhibit 10.8						ACNB Bank Variable Compensation Plan effective January 1, 2014, as amended. (Incorporated by reference to Exhibit 10.16 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Commission on March 14, 2022.)

Exhibit 10.9						Amended and Restated Employment Agreement by and among ACNB Corporation, ACNB Bank and James P. Helt dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.10						ACNB Corporation 2018 Omnibus Stock Incentive Plan. (Incorporated by reference to Exhibit A of the Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the Commission on March 27, 2018.)

Exhibit 10.11						Form of Exhibit B Split Dollar Policy Endorsement to ACNB Bank Amended and Restated Director Supplemental Life Insurance Plan dated November 27, 2018. (Incorporated by reference to Exhibit 99.4 of the Registrant’s Current Report on Form 8-K, filed with the Commission on November 28, 2018.)

Exhibit 10.12						Salary Continuation Agreement by and between ACNB Bank and James P. Helt dated as of November 27, 2018. (Incorporated by reference to Exhibit 99.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on November 28, 2018.)

Exhibit 10.13						Form of Subordinated Note Purchase Agreement dated March 30, 2021, by and among ACNB Corporation and the Purchasers. (Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 30, 2021.)

Exhibit 10.14						Amended and Restated Employment Agreement by and among ACNB Corporation, ACNB Bank and Jason H. Weber dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.2 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.15						Form of ACNB Bank Variable Compensation Plan Restricted Stock Agreement for Employees dated as of March 15, 2022. (Incorporated by reference to Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 21, 2022.)

Exhibit 10.16						Form of ACNB Bank Variable Compensation Plan Restricted Stock Agreement for Non-Employee Directors dated as of March 15, 2022. (Incorporated by reference to Exhibit 99.4 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 21, 2022.)

Exhibit 10.17						Salary Continuation Agreement by and between ACNB Bank and James P. Helt dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.18						Salary Continuation Agreement by and between ACNB Bank and Jason H. Weber dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.4 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.19						First Amendment to ACNB Bank Salary Continuation Agreement by and between ACNB Bank and James P. Helt dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.5 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.20						First Amendment to ACNB Bank Salary Continuation Agreement by and between ACNB Bank and Jason H. Weber dated as of October 5, 2022. (Incorporated by reference to Exhibit 99.7 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.21						Salary Continuation Agreement by and between ACNB Bank and Jason H. Weber dated as of January 31, 2022. (Incorporated by reference to Exhibit 99.8 of the Registrant’s Current Report on Form 8-K, filed with the Commission on October 7, 2022.)

Exhibit 10.22						Amended and Restated Employment Agreement between ACNB Bank and Douglas A. Seibel dated as of October 20, 2022. (Incorporated by reference to Exhibit 10.31 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Commission on March 3, 2023.)


Exhibit 10.23						Supplemental Executive Retirement Plan by and between ACNB Bank and Douglas A. Seibel dated as of November 27, 2018. (Incorporated by reference to Exhibit 99.2 of the Registrant’s Current Report on Form 8-K, filed with the Commission on November 28, 2018.)

Exhibit 10.24						Supplemental Executive Retirement Plan by and between ACNB Bank and Douglas A. Seibel dated as of October 20, 2022. (Incorporated by reference to Exhibit 10.33 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Commission on March 3, 2023.)

Exhibit 10.25						Form of ACNB Bank Variable Compensation Plan Restricted Stock Agreement for Employees dated as of March 15, 2023. (Incorporated by reference to Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 21, 2023.)

Exhibit 10.26						Amended and Restated Employment Agreement between ACNB Bank and Laurie A. Laub dated as of October 6, 2022. (Incorporated by reference to Exhibit 10.31 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 14, 2024.)

Exhibit 10.27						First Amendment to ACNB Bank Salary Continuation Agreement by and between ACNB Bank and Laurie A. Laub dated as of October 6, 2022. (Incorporated by reference to Exhibit 10.32 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 14, 2024.)

Exhibit 10.28						Salary Continuation Agreement by and between ACNB Bank and Laurie A. Laub dated as of October 6, 2022. (Incorporated by reference to Exhibit 10.33 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Commission on March 14, 2024.)

Exhibit 10.29						First Amendment to ACNB Bank Amended and Restated Executive Supplemental Life Insurance Plan dated December 31, 2014. (Incorporated by reference to Exhibit 99.2 of the Registrant’s Current Report on Form 8-K, filed with the Commission on November 3, 2023.)

Exhibit 10.30						ACNB Bank 2023 Executive Supplemental Life Insurance Plan dated November 1, 2023 and Participant Election Form. (Incorporated by reference to Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, filed with the Commission on November 3, 2023.)

Exhibit 10.31						Form of ACNB Bank Variable Compensation Plan Restricted Stock Agreement for Employees dated as of March 15, 2024. (Incorporated by reference to Exhibit 99.3 of the Registrant’s Current Report on Form 8-K, filed with the Commission on March 20, 2024.)

Exhibit 10.32						Employment Agreement by and between ACNB Corporation, ACNB Bank and Brett D. Fulk dated as of September 6, 2022. (Incorporated by reference to Exhibit 10.32 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Commission on March 14, 2025.)

Exhibit 10.33						Salary Continuation Agreement by and between ACNB Bank and Brett D. Fulk dated as of September 6, 2022. (Incorporated by reference to Exhibit 10.33 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Commission on March 14, 2025.)

Exhibit 10.34						Deferred Compensation Agreement by and between ACNB Bank and Brett D. Fulk dated as of September 6, 2022. (Incorporated by reference to Exhibit 10.34 of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Commission on March 14, 2025.)

Exhibit 31.1						Chief Executive Officer Certification of Quarterly Report on Form 10-Q.

Exhibit 31.2						Chief Financial Officer Certification of Quarterly Report on Form 10-Q.

Exhibit 32.1						Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2						Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


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Exhibit 104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		ACNB CORPORATION (Registrant)

Date:	May 9, 2025	/s/ James P. Helt
		James P. Helt
		President & Chief Executive Officer

		/s/ Jason H. Weber
		Jason H. Weber
		Executive Vice President/Treasurer &
		Chief Financial Officer (Principal Financial Officer)

TABLE OF CONTENTS

Part I - Financial Information Item 1 Financial Statements Note 1 Basis Of Presentation and Nature Of Operations Note 2 Business Combination Note 3 Earnings Per Share Note 4 Investment Securities Note 5 Loans and Allowance For Credit Losses Note 6 Goodwill and Intangible Assets Note 7 Deposits Note 8 Borrowings Note 9 Derivative Financial Instruments Note 10 Fair Value Measurements Note 11 Stock-based Compensation Note 12 Defined Benefit Pension Plan Note 13 Commitments and Contingencies Note 14 Accumulated Other Comprehensive Loss Note 15 Segment Reporting Item 2 Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 2 Management S Discussion and Analysis Of Financial Item 3 Quantitative and Qualitative Disclosures About Market Risk Item 4 Controls and Procedures Part II Other Information Item 1 Legal Proceedings Item 1A Risk Factors Item 2 Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3 Defaults Upon Senior Securities Nothing To Report Item 3 Defaults Upon Senior Securities Item 4 Mine Safety Disclosures Not Applicable Item 4 Mine Safety Disclosures Item 5 Other Information Item 6 Exhibits

Exhibits

ACNB 10-Q Quarter ended March 31, 2025

Exhibits